Last checked at 1 Oct 2009 10:45
Paints and Chemical Industries Company "Pachin"
S.A.E.
The Consolidated Financial Statements and
Auditor's Report
For the Financial Year Ended June 30, 2009
INDEPENDENT AUDITOR'S REPORT
To : Shareholders of Paints and Chemical Industries Company "Pachin" (S.A.E)
We have audited the accompanying consolidated financial statements of Paints and Chemical Industries Company "Pachin" (S.A.E) , which are comprised the balance sheet as of June 30, 2009, and the income statement, statement of changes in equity and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Egyptian Accounting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Egyption Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the financial position of Paints and Chemical Industries Company "Pachin" (S.A.E) as of June 30, 2009, and of its financial performance and its cash flow for the year then ended in accordance with the Egyptian Accounting Standards.
Cairo, Sebtember 15, 2009
Kamel Magdy Saleh ACA
F.E.S.A.A. (R.A.A. 8510)
| Paints and Chemical Industries Company "Pachin" S.A.E. | |||||||||
| Consolidated Balance Sheet | |||||||||
| As of June 30, 2009 | |||||||||
| Notes | 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | |||||
| Consolidated | Pachin | ||||||||
| EGP | EGP | EGP | EGP | ||||||
| Non - Current Assets | |||||||||
| Property, plant and equipment (Net) | (2b, 4) | 266 795 536 | 215 924 576 | 18 323 383 | 17 853 224 | ||||
| Projects under construction | (2c, 5) | 15 587 298 | 48 658 552 | 786 059 | 1 888 146 | ||||
| Other Non - Current Assets | |||||||||
| Investment in subsidiaries | (2f, 6) | -- | -- | 253 246 488 | 232 387 000 | ||||
| Available for sale investments | (2f, 7) | 774 906 | 774 906 | 774 906 | 774 906 | ||||
| Other long-term assets | (2d, 8) | 16 016 000 | 16 016 000 | 16 016 000 | 16 016 000 | ||||
| Total Long-Term Assets | 299 173 740 | 281 374 034 | 289 146 836 | 268 919 276 | |||||
| Current Assets | |||||||||
| Inventories (net) | (2g, 9, 17b) | 172 250 768 | 165 409 576 | 68 579 945 | 78 739 794 | ||||
| Letters of Credit | 1 013 907 | 7 363 465 | 367 285 | 2 034 087 | |||||
| Other assets | (2r, 10) | 534 765 | -- | 534 765 | -- | ||||
| Debtors and Accounts Receivable | |||||||||
| Accounts receivable (Net) | (2h, 11, 17b) | 38 158 944 | 36 603 351 | 27 504 783 | 30 990 136 | ||||
| Notes receivable (Net) | (12, 17b) | 10 408 758 | 10 558 224 | 2 672 815 | 5 766 840 | ||||
| Due from subsidiaries | (13) | -- | -- | 8 286 062 | 5 820 758 | ||||
| Other debit balances | (14) | 55 528 144 | 51 202 108 | 137 947 058 | 139 070 065 | ||||
| Investments for trading purposes | (2i, 15) | 45 537 368 | 75 772 987 | 3 234 918 | 317 727 | ||||
| Cash and cash equivalents | (2j, 16) | 96 150 631 | 61 850 705 | 17 262 738 | 18 824 940 | ||||
| Total Current Assets | 419 583 285 | 408 760 416 | 266 390 369 | 281 564 347 | |||||
| Current Liabilities | |||||||||
| Provisions | (2K, 17 a) | 38 543 924 | 38 928 731 | 35 540 820 | 35 836 819 | ||||
| Banks' overdraft | (18) | 12 636 387 | 41 609 365 | 50 164 | 1 249 091 | ||||
| Accounts and notes payable | (2L, 19) | 34 696 131 | 44 198 257 | 6 209 916 | 10 836 767 | ||||
| Short-term loans | (25) | 16 000 000 | -- | -- | -- | ||||
| Due to El-Obour for Paints | (20) | -- | -- | 14 360 114 | 10 957 576 | ||||
| Other credit balances | (21) | 54 568 990 | 40 469 301 | 16 570 629 | 17 939 534 | ||||
| Total Current Liabilities | 156 445 432 | 165 205 654 | 72 731 643 | 76 819 787 | |||||
| Working Capital | 263 137 853 | 243 554 762 | 193 658 726 | 204 744 560 | |||||
| Total Investment financed by : | 562 311 593 | 524 928 796 | 482 805 562 | 473 663 836 | |||||
| Shareholders Equity | |||||||||
| Paid-up capital | (22) | 200 000 000 | 200 000 000 | 200 000 000 | 200 000 000 | ||||
| Reserves | (23) | 201 754 501 | 191 420 791 | 175 558 975 | 170 627 297 | ||||
| Retained earnings | 31 262 524 | 16 838 942 | 19 190 548 | 3 951 441 | |||||
| Profits for the year | 91 041 360 | 107 917 721 | 87 760 875 | 98 633 564 | |||||
| Total Shareholders Equity | 524 058 385 | 516 177 454 | 482 510 398 | 473 212 302 | |||||
| Minority Interest | 2 324 314 | 182 398 | -- | -- | |||||
| Total Sharholders Equity and Minority Interest | 526 382 699 | 516 359 852 | 482 510 398 | 473 212 302 | |||||
| Long-term liabilities | (24) | 1 146 145 | 601 417 | -- | -- | ||||
| Long-term Loans | (25) | 24 000 000 | -- | -- | -- | ||||
| Deffered tax | (26) | 10 782 749 | 7 967 527 | 295 164 | 451 534 | ||||
| Total Financing of Working Capital and Long-Term Assets | 562 311 593 | 524 928 796 | 482 805 562 | 473 663 836 | |||||
| - The accompanying notes from (1) to (30), form an integral part of the financial statements. | |||||||||
| Paints and Chemical Industries Company "Pachin" S.A.E. | |||||||||
| Consolidated Income Statement | |||||||||
| From July 1, 2008 until June 30, 2009 | |||||||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||||||
| Consolidated |
| Pachin |
| ||||||
| Notes | EGP | EGP | EGP | EGP | |||||
| Sales (net) | (3) | 643 001 132 | 598 488 087 | 144 140 206 | 172 602 144 | ||||
| Cost of sales | (533 715 061) | (476 767 023) | (145 004 873) | (162 372 511) | |||||
| Gross Profit | 109 286 071 | 121 721 064 | ( 864 667) | 10 229 633 | |||||
| General and administrative expenses | (16 192 252) | (14 318 041) | (7 027 529) | (7 333 014) | |||||
| Provision used | ( 518 139) | (4 400 000) | -- | (1 000 000) | |||||
| Allowance for attending the Board of Directors | ( 452 300) | ( 283 000) | ( 167 500) | ( 144 000) | |||||
| Profit from Operations | 92 123 380 | 102 720 023 | (8 059 696) | 1 752 619 | |||||
| Interest expenses | (8 255 834) | (2 824 249) | ( 970 866) | ( 926 661) | |||||
| Other expenses | ( 32 803) | -- | -- | -- | |||||
| Investment income in subsidiaries companies | -- | -- | 93 953 000 | 94 952 500 | |||||
| Profit on sale of investments | 2 203 968 | 1 539 861 | 466 753 | 814 302 | |||||
| Gain on revaluation of investments for trading purposes | 2 524 544 | 1 734 075 | 15 380 | 178 086 | |||||
| Investment income | 35 157 | 44 732 | 35 157 | 44 732 | |||||
| Interest income | 890 261 | 2 990 966 | 224 861 | 956 007 | |||||
| Capital gain | 1 184 464 | 1 828 114 | 397 464 | 231 700 | |||||
| Other income | 2 106 001 | 1 261 553 | 1 863 023 | 1 810 816 | |||||
| Provisions no longer required | -- | 8 500 000 | -- | -- | |||||
| Currency evaluation differences | 1 282 405 | (3 579 048) | ( 320 571) | ( 977 987) | |||||
| Profit before Taxes and Minority Interest | 94 061 543 | 114 216 027 | 87 604 505 | 98 836 114 | |||||
| Income tax | ( 264 521) | (1 060 898) | -- | ( 653 906) | |||||
| Deferred tax | (26) | (2 815 222) | (5 184 883) | 156 370 | 451 356 | ||||
| Profit after Tax and before Minority Interest | 90 981 800 | 107 970 246 | 87 760 875 | 98 633 564 | |||||
| Minority interest | 59 560 | ( 52 525) | -- | -- | |||||
| Profit after Tax and Minority Interest | 91 041 360 | 107 917 721 | 87 760 875 | 98 633 564 | |||||
| - The accompanying notes from (1) to (30), form an integral part of the financial statements. | |||||||||
| Paint and Chemical Industires Company "Pachin" S.A.E. | ||||||||
| Consolidated Cash Flows Statement | ||||||||
| From July 1, 2008 till June 30, 2009 | ||||||||
| 30/06/2009 | 30/6/2008 | 30/06/2009 | 30/06/2008 | |||||
| Consolidated | Pachin | |||||||
| Notes | EGP | EGP | EGP | EGP | ||||
| Cash Flows from Operating Activities | ||||||||
| Net Profit before Taxes and Minoirty Interst | 94 061 543 | 114 216 027 | 87 604 505 | 98 836 114 | ||||
| Adjustments to Reconcile Net Profit to Net Cash Provided from Operating Activities | ||||||||
| Depreciation of fixed assets | 12 328 884 | 11 753 265 | 2 225 644 | 2 122 870 | ||||
| Capital gain | (1 184 464) | (1 828 114) | ( 15 380) | ( 178 086) | ||||
| Gain on revaluation of investments for trading purposes | (2 524 544) | (1 734 075) | ( 397 464) | ( 231 700) | ||||
| Profit on the sale of investments | (2 203 968) | (1 539 861) | ( 466 753) | ( 814 302) | ||||
| Provision utilized during the period | 518 139 | 4 400 000 | -- | 1 000 000 | ||||
| Provisions no longer required | -- | (8 500 000) | -- | -- | ||||
| Provision utilized | ( 384 807) | (2 235 889) | ( 295 999) | (1 547 194) | ||||
| Operating Profit before Working Capital Changes | 100 610 783 | 114 531 353 | 88 654 553 | 99 187 702 | ||||
| (Increase) decrease in receivables and other debit balances | (6 250 302) | 16 436 279 | 4 089 431 | (23 302 947) | ||||
| Decrease (increase) in inventories and letter of credit | 1 834 947 | (7 608 350) | 11 826 651 | 242 048 | ||||
| Increase (decrease) in creditors and other credit balances | 6 098 553 | 10 962 790 | (2 399 754) | 2 940 400 | ||||
| Net Cash Provided from Operating Activities | 102 293 981 | 134 322 072 | 102 170 81 | 79 067 203 | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of nvestments for trading purposes | (174 656 514) | (205 857 716) | (75 191 424) | (77 477 841) | ||||
| Proceeds from the sale of investments for trading purposes | 209 620 645 | 162 351 479 | 72 756 366 | 78 507 401 | ||||
| Purchase of fixed assets and other non-current assets | (31 144 375) | (65 166 256) | (2 971 227) | (2 653 917) | ||||
| Proceeds from the sale of fixed assets | 1 832 884 | 1 847 999 | 1 045 884 | 249 768 | ||||
| Purchase of investments in subsidiary (Pachin Libya) | -- | -- | (2 218 838) | -- | ||||
| Purchase of investments in subsidiary (Pachin for Inks) | -- | -- | (17 493 000) | (9 996 000) | ||||
| Net Cash (used in) Provided from Investing Activities | 5 652 640 | (106 824 94) | (24 072 239) | (11 370 589) | ||||
| Cash Flows from Financing Activities | ||||||||
| ( Payments) proceeds of banks - overdraft | (28 972 978) | 33 613 045 | (1 198 927) | ( 562 191) | ||||
| Proceeds from long-term loans | 40 000 000 | -- | -- | -- | ||||
| Dividends paid | (82 583 402) | (81 797 778) | (78 461 917) | (78 374 967) | ||||
| Net Cash (used in) Financing Activities | (71 556 380) | (48 184 733) | (79 660 844) | (78 937 158) | ||||
| Net change in cash and cash equivalents during the year | 34 299 926 | (23 760 395) | (1 562 202) | (11 240 544) | ||||
| Net cash and cash equivalents at beginning of the year | 61 850 705 | 85 611 100 | 18 824 940 | 30 065 484 | ||||
| Net cash and cash equivalents at end of the year | (16) | 96 150 631 | 61 850 705 | 17 262 738 | 18 824 940 | |||
| - The accompanying notes from (1) to (30), form an integral part of the financial statements. | ||||||||
| Paints and Chemical Industries Company "Pachin" S.A.E. | |||||||||||
| Consolidated Statement of Changes in Shareholders' Equity | |||||||||||
| From July 1, 2008 till June 30, 2009 | |||||||||||
| Paid-up | Reserves | Retained | Profits 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 for shareholders, employees, and Board of Directors | -- | -- | -- | (81 759 606) | ( 38 172) | (81 797 778) | |||||
| Net profits 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 | |||||
| Minority interest for Pachin for Paints - Libya | -- | -- | -- | -- | 2 244 326 | 2 244 326 | |||||
| Transferred to reserves | -- | 10 333 710 | -- | (10 333 710) | -- | -- | |||||
| Transferred to retained earnings | -- | -- | 14 423 582 | (14 423 582) | -- | -- | |||||
| Dividends for shareholders, employees, and Board of Directors | -- | -- | -- | (83 160 429) | ( 42 850) | (83 203 279) | |||||
| Net profits as of June 30, 2009 | -- | -- | -- | 91 041 360 | ( 59 560) | 90 981 800 | |||||
| Balance as of June 30, 2008 | 200 000 000 | 201 754 501 | 31 262 524 | 91 041 360 | 2 324 314 | 526 382 699 | |||||
| - The accompanying notes from (1) to (30), form an integral part of the financial statements. | |||||||||||
Paints and Chemical Industries Company "Pachin"
(S.A.E.)
Notes to the consolidated Financial Statements
As of June 30, 2009
1. The Group's 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.
Pachin for Paints and Chemical Industries Company
The company was established pursuant to a contract certified by the General Committee of Justice at the Arab Republic of Libya and according to the provisions of Law No. (5) for 1997 concerning investment of foreign capital and its executive regulation and amendments, and the decree of the General Committee's Treasurer No. 86 for 2006 concerning amending the executive regulation provisions for Law No. 5 for 1997.
The company's objective is to:
- Establish and operate a factory for manufacturing paintings and supplementary products with its various types, and other chemical materials and its packaging.
- Import various materials required for the project from abroad in the form of tools or equipments or in the form of spare parts, or the material required for operation such as the primary production material.
- Sell the project's products locally and abroad.
- Bring labor and foreign technical expertise required for the project.
- Open bank accounts locally and abroad and its management and the right to obtain loans and facilities.
- Transfer the profits.
- Own real-estate and deliverables required for the activity.
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:
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 % |
3. Sales Analysis
| Consolidated | Pachin | |||
| Quantity (Ton) | Amount'000 | Quantity (Ton) | Amount'000 | |
| Paints | 70 163 | 588 301 | 9 849 | 568 111 |
| Inks | 2 253 | 50 693 | 1 298 | 28 565 |
| Animal extract product | 842 | 4 007 | 842 | 4 007 |
| 643 001 | 144 140 | |||
4. Property, Plant and Equipments
Consolidated
| Land | Buildings | Machinery and Equipments | Vehicles | Tools | Furniture and Office Equipments | Total | |
| EGP | EGP | EGP | EGP | EGP | EGP | EGP | |
| Cost | |||||||
| July 1, 2008 | 40 149 216 | 98 480 339 | 129 155 326 | 15 168 517 | 14 762 121 | 13 577 732 | 311 293 251 |
| Additions | 483 875 | 45 905 826 | 9 761 481 | 3 059 653 | 2 715 325 | 2 289 468 | 64 215 628 |
| Disposals | (14 326) | (235 265) | (2 037 275) | (284 452) | (28 378) | (25 041) | (2 624 737) |
| Cost as of June 30, 2009 | 40 618 765 | 144 150 900 | 136 879 532 | 17 943 718 | 17 449 068 | 15 842 159 | 372 884 142 |
| Accumulated Depreciation | |||||||
| July 1, 2008 | -- | (20 264 140) | (48 394 651) | (10 714 158) | (7 269 716) | (8 726 009) | (95 368 674) |
| Depreciation charge | -- | (2 952 062) | (5 677 463) | (1 732 197) | (937 370) | (1 029 792) | (12 328 884) |
| Disposals | -- | 223 762 | 1 059 274 | 282 533 | 18 809 | 24 574 | 1 608 952 |
| As of June 30, 2009 | -- | (22 992 440) | (53 012 840) | (12 163 822) | (8 188 277) | (9 731 227) | (106 088 606) |
| NBV @ June 30, 2009 | 40 618 766 | 121 051 710 | 83 973 442 | 5 779 896 | 9 260 791 | 6 110 932 | 266 795 536 |
| NBV @ June 30, 2008 | 40 149 216 | 78 216 199 | 80 760 675 | 4 454 359 | 7 492 405 | 4 851 723 | 215 924 576 |
Pachin Company
| Land | Building | Machinery and Equipments | Vehicles | Tools | Furniture & Office Equipments | Total | |
| EGP | EGP | EGP | EGP | EGP | EGP | EGP | |
| Cost | |||||||
| July 1, 2008 | 173 143 | 19 788 333 | 29 417 794 | 6 096 592 | 5 563 832 | 6 813 420 | 67 853 114 |
| Additions | -- | -- | 2 668 824 | 426 286 | 353 337 | 263 141 | 3 711 588 |
| Disposals | 14 326)) | (235 265) | (2 037 275) | (284 452) | (28 378) | (21 941 | (2 621 637) |
| Cost of June 30, 2009 | 158 817 | 19 533 068 | 30 049 343 | 6 238 426 | 5 888 791 | 7 054 620 | 68 943 065 |
| Accumulated Depreciation | |||||||
| July 1, 2008 | -- | ( 10 024 059) | ( 25 576 203) | ( 5 308 928) | ( 3 698 530) | ( 5 392 170) | ( 49 999 890) |
| Depreciation charge | -- | (663 652) | (771 464) | ( 287 533) | (237 903) | (265 092) | ( 2 225 644) |
| Disposals | -- | 223 762 | 1 059 274 | 282 533 | 18 809 | 21 474 | 1 605 852 |
| As of June 30, 2009 | -- | ( 10 463 949) | ( 25 288 393) | ( 5 313 928) | ( 3 917 624) | ( 5 635 788) | ( 50 619 682) |
| NBV @ June 30, 2009 | 158 817 | 9 089 119 | 4 760 950 | 924 498 | 1 971 167 | 1 418 832 | 18 323 383 |
| NBV @ June 30, 2008 | 173 143 | 9 764 274 | 3 841 591 | 787 664 | 1 865 302 | 1 421 250 | 17 853 224 |
5. Projects under Construction
|
| Consolidated | Pachin | |||||
|
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | |||
|
| EGP | EGP | EGP | EGP | |||
| Machinery and equipments | 3 711 432 | 3 503 813 | 986 697 | 767 335 | |||
| Buildings | 6 172 845 | 35 171 400 | -- | -- | |||
| Tools and equipments | 15 681 | 109 259 | 681 15 | -- | |||
| Software and programs | 3 147 496 | 7 162 513 | 44 500 | 44500 | |||
| Assets under construction | 13 047 454 | 45 946 985 | 167 758 | 811 835 | |||
| Letter of credit (Fixed Assets) | 27 892 | 717 749 | -- | 717 749 | |||
| Capital expenditure | 2 511 952 | 1 993 818 | 892 27 | 358 562 | |||
| Balance | 15 587 298 | 48 658 552 | 059 786 | 1 888 146 | |||
6. Investment in Subsidiaries
| Company Name | Issued Capital EGP | Currency | Ownership % | Ownership Amount EGP | Paid % | 30/6/2009 Paid Amount EGP | 30/6/2008 Paid Amount EGP |
| Obour for Paints and Chemical Industries | 200 000 000 | EGP | 99. 95% | 199 900 000 | 100% | 199 900 000 | 199 900 000 |
| Pachin for Inks | 50 000 000 | EGP | 99. 96% | 49 980 000 | 100% | 49 980 000 | 32 487 000 |
| Pachin Libya | 2 000 000 | LYD | 50 % | 1 000 000 | 75 % | 3 366 488 | -- |
| 253 246 488 | 232 387 000 |
These companies are not listed in the stock market.
7. Available for Sale Investments
| Consolidated | Pachin | |||
| 30/6/2009 EGP | 30/6/2008 EGP | 30/6/2009 EGP | 30/6/2008 EGP | |
| Governmental bonds at the National Investment Bank | 906 774 | 774 906 | 906 774 | 774 906 |
The available for sale investment include also investment in Sefca amounting to EGP 1.5 Million and this investment is fully impaired due to that the company is under liquidation.
8. Other Long-Term Assets
Other long-term assets as of June 30, 2009 amounting to EGP 16 016 000 is Equivalent to Euro 2 200 000 represents 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 | ||||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||||
|
| EGP | EGP | EGP | EGP | |||
| Raw materials and packaging | 126 310 384 | 125 802 830 | 272 099 53 | 60 996 178 | |||
| Less: Provision for scrap materials | (264 130) | (500 396) | (130 264) | ( 500 396) | |||
| 126 046 254 | 125 302 434 | 142 835 52 | 60 495 782 | ||||
| Finished products | 31 952 406 | 25 448 613 | 580 434 9 | 11 039 635 | |||
| Less: Provision for finished goods | (798 649) | (798 649) | (798 649) | (798 649) | |||
| 31 153 757 | 24 649 964 | 931 635 8 | 10 240 986 | ||||
| Fuel and spare parts | 8 030 322 | 7 774 437 | 525 127 4 | 4 234 626 | |||
| Less: Provision for spare parts | (481 533) | (481 533) | (481 533) | (481 533) | |||
| 7 548 789 | 7 292 904 | 992 645 3 | 3 753 093 | ||||
| Work in-progress | 5 409 996 | 6 016 178 | 300 621 1 | 2 340 464 | |||
| Consignment goods with others | 862 040 | 1 301 893 | 040 862 | 1 301 893 | |||
| Inventories for resale purpose | 684 302 | 299 548 | 302 684 | 299 548 | |||
| Scrap | 545 630 | 546 655 | 238 295 | 308 028 | |||
| 172 250 768 | 165 409 576 | 945 579 68 | 78 739 794 | ||||
10. Other Assets
| Consolidated | Pachin | ||||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||||
|
| EGP | EGP | EGP | EGP | |||
| Factory at old Cairo | 543 765 | -- | 543 765 | -- | |||
| 543 765 | -- | 543 765 | -- | ||||
The company's management decided to dispose of some assets that are not used in the main company's operations. Therefore, the company started to sell these assets and it is expected to finalize this sale during the period of twelve month. These assets to be disposed are represented by the factory at old Cairo with an area of 37 935 q2 including area of 267 Square a seized by hand.
11. Accounts Receivable (net)
| Consolidated | Pachin | ||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||
| EGP | EGP | EGP | EGP | ||
| Accounts receivable | 49 509 844 | 47 486 112 | 683 255 35 | 38 741 036 | |
| Less: | |||||
| Provision for doubtful debts | (11 350 900) | (10 882 761) 761) | (900 750 7) | (7 750 900) | |
| 38 158 944 | 36 603 351 | 783 504 27 | 30 990 136 | ||
12. Notes Receivable (Net)
| Consolidated | Pachin | ||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||
| EGP | EGP | EGP | EGP | ||
| Notes receivable | 11 896 758 | 11 996 224 | 3 110 815 | 6 204 840 | |
| Less: | |||||
| Provision for doubtful debts | (1 488 000) | (1 438 000) | (000 438) | (438 000) | |
| 10 408 758 | 10 558 224 | 2 672 815 | 5 766 840 | ||
13. Due from Subsidiary (Pachin for Inks)
The balance of this account amounted to EGP 8 286 062, represents the amount stated in the independent balance sheet of paints and chemical industries company (Pachin), which was paid by Pachin on behalf of Pachin for inks company.
14. Other Debit Balances
| Consolidated | Pachin | ||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||
| EGP | EGP | EGP | EGP | ||
| Accrued income | 89 194 | 299 370 | 809 985 93 | 95 100 698 | |
| Advanced to purchase investments * | -- | 1 147 650 | -- | 1 147 650 | |
| Suppliers debit balances | 4 333 541 | 2 930 257 | 252 752 1 | 1 567 929 | |
| Employees loans | 750 790 | 804 711 | 790 750 | 804 711 | |
| Deposits with others | 2 723 658 | 1 806 099 | 799 887 1 | 958 997 | |
| Corporate tax** | 28 860 101 | 28 882 618 | 101 860 28 | 28 882 618 | |
| Withholding tax | 7 397 719 | 7 409 913 | 429 220 7 | 7 232 623 | |
| Sales tax | 2 285 207 | -- | -- | -- | |
| Other debit balances | 9 087 934 | 7 921 490 | 878 489 3 | 3 374 839 | |
| 55 528 144 | 51 202 108 | 058 947 137 | 139 070 065 | ||
* This balance represents advanced 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%) which was paid during the month June 2008.
** This balance represents the amount of EGP 12.447 million, which represents the amount paid to the Tax Authority for the years 1993 - 1997, according for the decisions of the Internal Committee and the Appeal Committee. This amount will be settled against the provision available for this objective, upon receiving the court decision. (Refer to Note No. 30), and the amount of EGP 16.413 million, paid on the due tax account for the years 1998 - 2001.
15. Investments for Trading Purposes
| Consolidated | Pachin | ||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||
| EGP | EGP | EGP | EGP | ||
| Investment Certificates | 45 537 368 | 75 772 987 | 3 234 918 | 317 727 | |
| 45 537 368 | 75 772 987 | 3 234 918 | 317 727 | ||
16. Cash and Cash Equivalents
| Consolidated | Pachin | ||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||
| EGP | EGP | EGP | EGP | ||
| Banks current accounts | 36 782 392 | 13 083 020 | 688 533 9 | 3 596 031 | |
| Banks time deposits | 54 325 628 | 42 046 799 | 914 916 6 | 12 676 673 | |
| Checks under collection* | 5 042 611 | 6 720 886 | 136 812 | 2 552 236 | |
| 96 150 631 | 61 850 705 | 17 262 738 | 18 824 940 | ||
* Represents outstanding checks with due dates before 30/6/2009, collected after this date.
17. 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 30/6/2009 | |
|
| 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 | -- | -- | (384 807) | 5 811 936 |
| Other provisions | 582 705 | -- | -- | -- | 582 705 |
| Total provisions (current liabilities) | 38 928 731 | -- | -- | (384 807) | 38 543 924 |
| B- Provisions-Current Assets |
|
| |||
| Impairment in accounts receivable | 10 882 761 | 468 139 | -- | -- | 11 350 900 |
| Impairment in notes receivable | 1 438 000 | 50 000 | -- | -- | 1 488 000 |
| Raw material provision | 500 396 | -- | -- | (236 266) | 264 130 |
| Finished goods provision | 798 649 | -- | -- | -- | 798 649 |
| Spare parts provision | 481 533 | -- | -- | -- | 481 533 |
| 53 030 070 | 518 139 | -- | (621 073) | 52 927 136 |
18. Banks' Overdraft
Banks' overdraft represent credit facilities that the group has obtained from various banks as of June 30, 2008 amounting to EGP 12 636 387 These facilities are secured by time deposits.
19. Accounts and Notes Payable
| Consolidated | Pachin | ||||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | ||
|
| EGP | EGP | EGP | EGP | |
| Accounts payable | 33 124 560 | 42 549 461 | 6 156 059 | 10 534 572 | |
| Notes payable | 1 571 571 | 1 648 796 | 53 857 | 302 195 | |
| 34 696 131 | 44 198 257 | 6 209 916 | 10 836 767 | ||
20. Due to Subsidiary (El-Obour for Paints and Chemicals Industries Company)
The balance of this account amounting to EGP 14 360 114, represents the operations results between Paints and Chemicals Industries Company (Pachin) and El Obour for pint and chemicals industries Company.
21. Other Credit Balances
| Consolidated | Pachin | |||
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 30/6/2008 | |
| EGP | EGP | EGP | EGP | |
| Accrued expenses | 7 904 075 | 9 125 517 | 576 724 6 | 7 785 155 |
| Accounts receivable - credit balances | 21 632 554 | 10 056 260 | 384 780 1 | 2 454 789 |
| Sales tax | 8 672 711 | 2 862 528 | 268 029 2 | 1 057 193 |
| Fixed assets - creditors | 1 731 837 | 3 295 574 | 244 45 | 31 594 |
| Deposit to others | 6 359 651 | 5 366 255 | 536 317 1 | 915 840 |
| Employees share in profits | 2 100 651 | 1 523 624 | 104 43 | 42 242 |
| Withholding tax | 307 280 | 404 159 | 314 102 | 147 399 |
| Current portion of long-term liabilities | 181 060 | 352 172 | -- | -- |
| Salary tax | 279 097 | 130 984 | 097 279 | 130 984 |
| Other employees benefits | 4 082 371 | 4 082 371 | 371 082 4 | 4 082 371 |
| Income tax - Tax Authority | 264 521 | 1 060 898 | -- | 653 906 |
| Other credit balances | 1 053 182 | 2 208 959 | 735 166 | 638 061 |
| 54 568 990 | 40 469 301 | 629 570 16 | 17 939 534 | |
22. 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.
23. Reserves
| Consolidated | Pachin | |||
|
| 30/6/2009 | 30/6/2008 | 30/6/2009 | 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 | 975 558 175 | 170 627 297 | |
24. Long-Term Liabilities
The long-term liabilities are represented as the deferred revenue related to El Obour for Paints and Chemicals industries company granted assets which will be recorded revenue over the estimated useful lives of those assets with an amount of EGP 1 146 145.
25. Long-Term Loans
Pachin for Inks Company obtained a loan amounting to EGP 40 million during the month of January 2009 from the Egyptian Industrial Development and Labor Bank guaranteed jointly by the Paints and Chemicals Industries Company (Pachin) and El Obour for Paints and Chemical Industries Company. Pachin for Inks Company is obligated not to pledge any of its tools or buildings to any other banks.
The company is obligated to pay the financing over five semi-annual installments amounting to EGP 8 million. The first installment is due on December 31, 2009 (after a grace period of 6 month) in the amount of EGP 9.444 million after adding interest and commission at the rate of the loan corridor - 1.5% annually, amounting to 13% annually and commission at the rate of .5% monthly. The last installment is due on December 31, 2011.
| | | June 30, 2009 |
| | | EGP |
| Short-term portion | | 16 000 000 |
| Long-term portion | | 24 000 000 |
| | | 40 000 000 |
26. Deferred tax
The balance of this account amounted to EGP 10 782 749 represent in Deferred tax liabilities resulting from the temporary differences between the net book value of fixed assets based on tax basis, and their net book value based on accounting basis.
|
| 30/6/2009 | 30/6/2008 | |
|
| EGP | EGP | |
| Opening balance | 7 967 527 | 2 782 644 | |
| During the year | 2 815 222 | 5 184 883 | |
| Balance as of end of the year | 10 782 749 | 7 967 527 |
27. Contingent Liabilities
The uncovered portion of the Letters of Credit amounted to EGP 4.170 million as of June 30, 2009.
28. Capital Commitments
The capital commitments as of June 30, 2009 are represented in the unpaid portion of the company's share in Pachin - Libya for Paints and Chemical Industries amounting to 250 000 Libyan Dinar.
30. Tax Position
Paints and Chemicals Industries Company
First: Corporate Tax
Fourth: Sales Tax
The Tax Authority inspected and assessed the company's books from the inception date until 31/8/1998. The Tax Authority inspected and assessed the company's books for the period from 1/9/1998 until 30/4/2002. The inspection resulted in due tax in the amount of EGP 175 307. The company did not pay this amount since there is due tax in favor of the company amounting to EGP 196 614. This amount represents the value of stamp tax for which a final ruling was issued in the company's favor. This amount is currently being settled with the Tax Authority. The Tax Authority inspected the period from 1/5/2002 until 31/3/2005 and the inspection resulted in due tax in the amount of EGP 127 027. The Tax Authority inspected the period from 1/4/2005 until 31/7/2006 and the inspection resulted in due tax in the amount of EGP 210 468.These items were discussed at the Internal Committee and the tax was reduced by the amount of EGP 196 032.El-Obour for Paints and Chemicals Industries Company
The company's books where not inspected for salary tax yet.
| Chief financial officer Accountant: Ashraf Moustafa El Kahky | Chairman and Managing Director Eng.: Sherif Mahmoud Ahmed Shawky |