Paints&ch.gdr Regulatory News (PCLD)

14 Feb 2006 16:01

Paints and Chemical Industries Co.14 February 2006 PAINTS AND CHEMICAL INDUSTRIES COMPANY S.A.E. Consolidated Balance Sheet As at 31 December Consolidated Holding company Notes 2005 Jun-05 2005 Jun-05 L.E. L.E. L.E. L.E. Fixed Assets Fixed Assets 8 184,132,185 187,985,884 21,319,253 21,912,575 Projects under 10,698,190 6,321,351 1,572,880 1,121,500 constructions Investment in subsidiary 9 - - 192,405,000 169,915,500 company Other investments 10 774,906 774,906 774,906 774,906 Other long-term assets - - - - 195,605,281 195,082,141 216,072,039 193,724,481 Current Assets Inventories 11 142,789,959 149,536,140 70,164,213 75,358,530 Letters of Credit 5,271,570 2,419,456 1,685,628 1,555,502 Accounts and notes 12 72,906,606 73,304,348 33,080,699 31,956,920 receivables Amounts owing from 0 0 74,090 964,937 subsidiaries Other debit balances 13 45,370,172 40,941,268 73,665,477 100,704,673 Short-term investments 14 37,599,073 56,415,978 26,075,043 56,415,978 Cash and cash equivalents 15 54,879,561 55,926,483 22,769,241 26,938,808 358,816,941 378,543,673 227,514,391 293,895,348 Total assets 554,422,222 573,625,814 443,586,430 487,619,829 Liabilities and Shareholders Equity Current Liabilities Banks - overdraft 16 36,315,938 29,946,958 23,836,627 3,377,842 Accounts and notes 30,639,879 33,369,247 8,180,018 9,365,643 payable Other credit balances 17 31,405,904 34,873,985 17,624,023 19,451,159 Amounts owing to 0 202,800 subsidiaries Dividends payable 257,986 257,986 257,986 257,986 98,619,707 98,448,176 50,101,454 32,452,630 Provisions 18 29,660,684 29,945,448 27,780,077 27,780,077 Long-term liabilities 21 1,967,726 1,967,726 -- -- Total Liabilities 130,248,117 130,361,350 77,881,531 60,232,707 Share Capital and Reserves Share capital 19 200,000,000 200,000,000 200,000,000 200,000,000 Legal reserve 20 96,092,967 89,256,263 84,195,014 80,818,518 Other reserves 20 78,415,035 78,401,014 78,415,035 78,401,014 Retained earnings 20 3,063,605 1,781,129 1,043,741 637,661 Profit for the 46,478,315 73,702,171 2,051,109 67,529,929 period/year Total Share Capital and 424,049,922 443,140,577 365,704,899 427,387,122 Reserves Minority interest 124,183 123,887 -- -- Total Liabilities and 554,422,222 573,625,814 443,586,430 487,619,829 Shareholders' Equity - The attached notes form an integral part of the financial statements. Consolidated Profit & Loss Accounts Year ended 31 December_ Consolidated Holding company Notes 2005 2004 2005 2004 L.E. L.E. L.E. L.E. Net sales 3 228,497,630 220,739,683 67,469,219 68,825,898 Cost of Sales (177,991,904) (177,337,993) (62,874,552) (64,100,037) Gross profit 50,505,726 43,401,690 4,594,667 4,725,861 General and administrative expenses (5,461,421) (5,339,069) (4,478,115) (4,484,465) Interest expenses (1,987,953) (972,007) (1,069,659) (452,367) Other Income 20,776 230,463 18,045 136,963 Interest income 862,042 836,545 476,949 695,018 Profit on sale of investment 1,049,328 1,158,458 1,049,328 1,158,458 Investment income 1,829,888 1,719,873 1,590,163 1,719,873 Profit from operations 46,818,386 41,035,953 2,181,378 3,499,341 Profits/Losses from foreign currency (350,851) (168,363) (130,269) (75,527) translation Capital gain 33,000 0 0 0 Profit on ordinary activities before 46,500,535 40,867,590 2,051,109 3,423,814 taxes Taxation 4 - - - - Profit after tax 5 46,500,535 40,867,590 2,051,109 3,423,814 Minority interest (22,220) (18,722) - - Profit after tax and minority interest 5 46,478,315 40,848,868 2,051,109 3,423,814 Employees' and Directors' bonus (4,266,667) (3,919,444) (1,627,778) (1,627,778) Profit attributable to shareholders 42,211,648 36,929,424 423,331 1,796,036 Consolidated Earnings per share 6 2.11 1.85 0.02 0.09 Year ended 31 December Consolidated Holding company 2005 2004 2005 2004 Cash flows from operating activities L.E. L.E. L.E. L.E. Net profit before tax 46,500,535 40,867,590 2,051,109 3,423,814 Adjustments: Depreciation 4,512,789 4,629,015 1,079,822 1,235,347 Amortization - - Net provisions formed and (utilized) (326,596) - (41,832) - Profit on sale of fixed assets - - - - Profit on sale of investments (1,049,328) (1,158,458) (1,049,328) (1,158,458) Operating profit before working capital changes 49,637,400 44,338,147 2,039,771 3,500,703 (Increase ) or decrease in debtors (4,031,162) (324,141) 26,806,264 47,823,900 (Increase ) or decrease in inventories 3,852,235 (10,551,424) 5,106,023 (13,056,442) Increase or (decrease) in creditors (6,206,833) 20,153,786 (2,800,281) 8,242,282 Net cash from operating activities 43,251,640 53,616,368 31,151,777 46,510,443 Cash flows from investing activities Purchase of fixed assets and other long-term assets (5,035,929) (1,870,650) (937,880) (675,863) Proceeds from sale of fixed assets 0 0 0 0 Proceeds from sale of investments 93,738,637 57,030,942 88,847,087 57,030,942 Purchase of investments (73,872,404) (45,662,528) (57,456,824) (45,662,528) Purchase of investments in subsidiary - - (22,489,500) - Net cash from in investing activities 14,830,304 9,497,764 7,962,883 10,692,551 Cash flows from financing activities Cash flows from financing activities activities Dividends paid (65,497,846) (63,630,232) (63,743,012) (62,381,006) Net cash used in financing activities (65,497,846) (63,630,232) (63,743,012) (62,381,006) Net (decrease) in cash & cash equivalents (7,415,902) (516,100) (24,628,352) (5,178,012) Net cash & cash equivalents at beginning of period 25,979,525 2,837,702 23,560,966 10,769,046 Net cash & cash equivalents at end of period 18,563,623 2,321,602 (1,067,386) 5,591,034 Cosolidated Changes in Shareholders' Equity Statement Share Legal Other Retained Profit Total Capital Reserve Reserves Earnings For the year Balance at 1 July 2004 200,000,000 82,895,829 78,271,164 4,316,269 69,237,703 434,720,965 Transfer to reserves - 6,360,434 129,850 - (6,490,284) - Dividends - - - (2,535,140) (62,747,419) (65,282,559) Current year profit - - - - 73,702,171 73,702,171 Balance at 30 June 2005 200,000,000 89,256,263 78,401,014 1,781,129 73,702,171 443,140,577 Transfer to reserves - 6,836,704 14,021 (6,850,725) - Dividends - 1,282,476 (66,851,446) (65,568,970) Current year profit - 46,478,315 46,478,315 Balance at 31 December 2005 200,000,000 96,092,967 78,415,035 3,063,605 46,478,315 424,049,922 Notes to the Consolidated Financial Statements 1- The Group Paints and Chemical Industries Company S.A.E. (PACHIN) is an Egyptian Joint Stock Company. Following the sale by the Holding Company for Chemical Industries of part of its holding via a GDR offer, has reduced its share to less than 50 % , and the company has become subject to the Companies Law No. 159 for 1981. The objective of the company is to manufacture various kinds of paints, varnishes, printing inks, animal extract products and related products. Purchasing and dividing land for the purpose of using or reselling and performing specialized construction works. El-Obour for Paints and Chemicals Industries Company S.A.E is an Egyptian Joint Stock Company established under law 8 for 1997.The Company was registered on 14 January 1999 at the Commercial Registry. The objective of the company is to manufacture various kinds of paints, varnishes, printing inks, animal extract products and related products. 2- Significant accounting policies Basis of accounting The financial statements are prepared in accordance with the Egyptian Accounting Standards. Basis of consolidation The consolidated financial statements include subsidiaries under control of Paints and Chemicals Industries Company, which owns 99.95% of El Obour for Paints and Chemicals Industries Company. -- All material intercompany transaction are eliminated in the consolidated financial statement. -- Acquisition of subsidiaries are accounted for by the purchase method. -- The consolidated income statement reflects the subsidiary's results of operations starting from the date of acquisition, and the minority interest share of profit is eliminated. Sales Sales are stated net of sales tax. Revenue recognition Sales of goods are recognized when goods are dispatched to customers. Foreign currency transactions Group companies maintain their records in Egyptian pounds. Transactions denominated in foreign currencies are recorded at exchange rates prevailing at the date of the transaction. At year-end, monetary assets and liabilities denominated in foreign currencies are translated to Egyptian pounds at the exchange rate of the financial statements date. Exchange differences are taken into the income statement. Net profit attributable to shareholders Net profit after tax attributable to the shareholders, is stated after deducting all claims against it other than those of the shareholders. The following amounts, treated in the local accounts as profit distributions, (based on the company's statutes and the Egyptian companies law) have been charged in these financial statements, to profits before arriving at the net profit attributable to shareholders as follows: i- Board of Directors profit related bonuses. ii- Employees bonuses that are calculated as a percentage of the dividends declared to shareholders in any specific year. (See Note 5) PAINTS AND CHEMICAL INDUSTRIES COMPANY S.A.E. Notes to the Consolidated Financial Statements Earnings per Share Earnings per share figures are calculated by dividing net profit attributable to the shareholders by the weighted average number of shares outstanding during the period (see Note 6). Fixed assets Fixed assets are recorded at historical cost and are depreciated over their estimated useful lives using the straight line method as follows: Buildings 2-5% Plant & equipment 4.9-7.5% Vehicles 10-20% Tools 7.5% Furniture & office equipment 10% Investments Long-term investments are stated at cost, permanent diminution in values are written off. Amounts deposited with the National Bank for Investment for purchasing Government bonds, are treated as long term investments, an equivalent amount is credited to a special reserve. Inventories Inventories are stated at the lower of cost or net realizable value. Costs are determined as follows: raw materials, packing materials, spare parts and fuel costs, which are calculated on moving average basis. Work in progress costs include direct and indirect manufacturing costs of partially completed stages. Finished products costs include all manufacturing costs. Financial instrument Financial assets The company's principal financial assets are bank balances, cash, trade receivable and equity investments. Trade receivable are stated at their nominal value as reduced by appropriate allowance for estimated irrecoverable amounts. Financial liabilities Financial liabilities are classified according to the substance of the contractual arrangements entered into. Significant financial liabilities include bank loans and overdrafts and trade and other payables. Finance charges are accounted for on accrual basis. Trade and other payables are stated at their nominal value. Short term investments Short term investments are stated at cost or market value. The issuance premium of governmental bonds will be amortized within 3 years. 3- Turnover analysis by division Consolidated Holding company 2005 2004 2005 2004 LE'000 LE'000 LE'000 LE'000 Paints 203,112 190,299 42,083 38,385 Printing Inks 24,625 29,461 24,625 29,461 Animal Extract Products 761 980 761 980 228,498 220,740 67,469 68,826 4- Taxation Paints and Chemicals Industries Company The Corporation Tax rate in Egypt is 32% for industrial companies, in addition to devolopment charge of 2 %. El-Obour for Paints and Chemicals The company currently enjoys a tax holiday starting from the fiscal year following the date of commenced production. (9 November 2000) 5- Profit attributable to shareholders Consolidated Holding company Reconciliation to profits after taxes 2005 2004 2005 2004 according to statutory accounts LE LE LE LE * Profit after taxes per local accounts 46,478,315 40,848,868 2,051,109 3,423,814 * Provision for Directors' profit related bonuses, (4,266,667) (3,919,444) (1,627,778) (1,627,778) and employees profit share treated as distribution in statutory accounts. Profit attributable to shareholders per attached 36,929,424 423,331 1,796,036 profit and loss account 6- Earnings per share Consolidated Consolidated earnings per share figures are calculated by dividing the profit attributable to the shareholders by the weighted average number of shares in issue. For 2005, profits amounted to L.E 42,211,648 (2004:L.E. 36,929,424) by 20,000,000 shares. Holding company Earnings per share figures are calculated by dividing the profit attributable to the shareholders by the weighted average number of shares in issue. For 2005 profits amounted to L.E 423,331 (2004:L.E.1,796,036) by 20,000,000 shares for two years. 7- Dividends In respect to the year ended 30 June 2005, a dividend of L.E 2.85 per share is proposed by Board of Directors and approved by the Annual General Meeting held on 13 november 2005. 8- Fixed Assets Consolidated Land Building Machinery and Equipments Tools Furniture & office equipment 2005 LE LE LE LE LE LE LE Cost 1 July 2005 39,818,434 79,528,981 100,301,041 11,997,169 11,530,423 10,778,263 253,954,311 Addition / - 355,604 116,633 84,920 2,558 99,375 659,090 Transfers Disposals - - - (246,105) - - (246,105) 31 December 39,818,434 79,884,585 100,417,674 11,835,984 11,532,981 10,877,638 254,367,296 2005 Accumulated Depreciation 1 July 2005 - 14,028,693 32,256,258 8,501,486 4,854,102 6,327,888 65,968,427 Depreciation - 1,025,541 2,241,976 554,415 310,081 380,776 4,512,789 Charge Disposals - - - (246,105) - - (246,105) 31 December - 15,054,234 34,498,234 8,809,796 5,164,183 6,708,664 70,235,111 2005 NBV @ 31 39,818,434 64,830,351 65,919,440 3,026,188 6,368,798 4,168,974 184,132,185 December 2005 NBV @ 30 June 39,818,434 65,500,288 68,044,783 3,495,683 6,676,321 4,450,375 187,985,884 2005 The Holding Company Land Building Machinery and Equipments Tools Furniture & office equipment 2005 LE LE LE LE LE LE LE Cost 1 July 2005 173,143 19,337,271 28,657,752 6,433,100 4,186,836 5,929,919 64,718,021 Addition / - 335,076 - 79,322 2,558 69,544 486,500 Transfers Disposals - - - (112,900) - - (112,900) 31 December 173,143 19,672,347 28,657,752 6,399,522 4,189,394 5,999,463 65,091,621 2005 Accumulated Depreciation 1 July 2005 - 8,472,706 20,872,553 5,773,251 3,041,235 4,645,701 42,805,446 Depreciation - 258,930 450,926 132,550 99,498 137,918 1,079,822 Charge Disposals - - - (112,900) - - (112,900) 31 December 0 8,731,636 21,323,479 5,792,901 3,140,733 4,783,619 43,772,368 2005 NBV @ 31 173,143 10,940,711 7,334,273 606,621 1,048,661 1,215,844 21,319,253 December 2005 NBV @ 30 June 173,143 10,864,565 7,785,199 659,849 1,145,601 1,284,218 21,912,575 2005 Consolidated Holding company December 2005 June 2005 December 2005 L.E L.E L.E L .E. 9- Investments in subsidiary companies El-Obour for Paints and Chemicals Industries Company 179,910,000 164,917,500 PACHIN for Inks - - 12,495,000 4,998,000 192,405,000 169,915,500 10- Other investments Government Bonds via National Investment Bank 774,906 774,906 11- Inventories Raw materials, packaging materials and spare parts 57,013,331 64,448,055 Work in progress 4,189,284 3,101,355 2,199,545 1,488,704 Finished products 25,379,219 18,869,191 10,715,088 9,044,240 Scraps 348,224 466,724 94,189 137,740 Inventories for the purpose of resale 142,060 239,791 142,060 239,791 Total 142,789,959 149,536,140 70,164,213 75,358,530 The above figures are shown net of provisions for slow moving and obsolete items amounting to LE 1,421,650. 12- Accounts and notes receivables Accounts receivables 31,083,747 27,275,249 25,020,598 22,416,667 *Notes receivables 41,822,859 46,029,099 8,060,101 9,540,253 72,906,606 73,304,348 33,080,699 31,956,920 *Includes notes receivable due within more than one year The above figures are shown net of provisions for doubtful debts amounting to LE 20,899,340. 13- Other debit balance Accrued income 177,911 548,986 35,248,013 63,517,486 Suppliers debit balances 2,975,890 1,865,882 1,550,528 1,069,864 Employees loans 746,529 2,216,190 746,529 734,390 Deposits withheld 2,860,622 2,490,862 2,356,581 2,010,393 Corporate tax 24,857,954 24,857,954 24,857,954 24,857,954 Withholding tax 5,363,030 4,915,940 5,363,030 4,915,940 Others 8,388,236 4,045,454 3,542,842 3,598,646 45,370,172 40,941,268 73,665,477 100,704,673 14- Short-term investments Treasury Bills 11,524,030 18,340,935 0 18,340,935 Governmental bonds(USD)* 5,402,542 5,402,542 5,402,542 5,402,542 Mutual funds 172,501 172,501 172,501 172,501 Certificates of deposits 20,500,000 32,500,000 20,500,000 32,500,000 37,599,073 56,415,978 26,075,043 56,415,978 * Include issuance premium amounting to L.E.214,768 after current year's amortization amounting to L.E. 429,536. Consolidated Holding company December 2005 June 2005 December 2005 L.E L.E L.E L.E. 15- Cash and cash equivalents Cash on hand 3,983,686 1,828,595 Current accounts 4,419,708 20,482,077 1,278,615 6,137,582 Time deposits (see Note 16) 43,656,905 31,332,304 17,106,939 18,298,450 Checks under collection 2,819,262 4,112,102 2,555,092 2,502,776 54,879,561 55,926,483 22,769,241 26,938,808 16- Bank overdraft Bank overdrafts are secured by time deposits amounting to LE 36,316 million. 17- Other credit balances Advance receipts from customers 10,976,528 8,778,072 4,078,202 2,218,314 Accrued expenses 4,276,273 6,795,490 3,854,607 6,410,291 Sales tax 2,723,775 5,594,105 811,165 703,923 Deposit withheld 2,386,013 3,041,709 761,298 1,365,978 Employees share in profit 37,370 27,690 37,370 27,690 Other employees benefits 4,082,370 4,082,370 4,082,370 4,082,370 Fixed assets creditors 463,677 429,001 218,939 258,506 Tax withheld 446,800 1,320,054 327,137 416,134 Current portion of long term liabilities 161,364 426,657 0 0 Other creditors 5,851,734 4,378,837 3,452,935 3,967,953 31,405,904 34,873,985 17,624,023 19,451,159 18- Provisions Tax provision 22,749,283 22,749,283 22,749,283 22,749,283 Other provisions 6,911,401 7,196,165 5,030,794 5,030,794 29,660,684 29,945,448 27,780,077 27,780,077 19- Share Capital Authorized 200,000,000 200,000,000 200,000,000 200,000,000 Issued and fully paid 200,000,000 200,000,000 200,000,000 200,000,000 Nominal value per share 10 10 10 10 Number of shares 20,000,000 20,000,000 20,000,000 20,000,000 20- Reserves Legal Reserve 96,092,967 89,256,263 84,195,014 80,818,518 Other Reserves 78,415,035 78,401,014 78,415,035 78,401,014 Retained Earnings 3,063,605 1,781,129 1,043,741 637,661 177,571,607 169,438,406 163,653,790 159,857,193 Consolidated Holding company December 2005 June 2005 December 2005 June 2005 21- Long term liabilities Sales tax relating to fixed assets 1,390,526 1,390,526 - - Differed revenue 577,200 577,200 - - 1,967,726 1,967,726 - - 22- Contingent liabilities Comprised of Letters of Credit amounting to L.E. 2.024 million. December 2005 December 2004 December 2005 December 2004 23- Net cash and cash equivalents Cash and cash equivalents 54,879,561 31,385,361 22,769,241 19,624,560 Banks - overdrafts (36,315,938) (29,063,759) (23,836,627) (14,033,526) 18,563,623 2,321,602 (1,067,386) 5,591,034 24- Tax situation Corporate income tax (Paints and Chemicals Industries Company) The Tax Authority inspected the company's books, and the taxes were settled and paid for the years till June 30, 1993. For the years 1994/1997, the final resolution regarding the taxable income has not yet been determined. Whereas the argument between the company and Tax Authority is currently under assessment by the court. For the years 1998/2001, the Tax Authority inspected the company's books which resulted an additional tax claim. The company objected to this claim and a number of disputed points discussed with an Internal Committee from the Tax Authority. The claims became EGP 26.5 million according to the Internal Committee. The company objected to a number of points and the final resolution has not yet been determined. Whereas the argument between the company and Tax Authority is currently under assessment by the Appeal Committee. For years ending June 30, 2002 , 2003 , 2004 and 2005 the company's books have not been inspected by the Tax Authority. However, income tax due to the Tax Authority was paid as per the company's tax return. 25- Management of financial instrument risk Credit risk The group's credit risk is primarily attributable to its trade and notes receivables. The amount presented in the balance sheet are net of allowance for doubtful receivable (if any), estimated by the company. Risk of changes in foreign exchange rates The group's expenditures and its proceeds are affected by the risk of changes in foreign exchange rates as well as the retranslation of its monetary assets and liabilities denominated in foreign currencies. 26- Capital commitment Represents the unpaid portion of Paints and Chemicals Industries Company (PACHIN) share in El-Oboure for Paints and Chemicals which amounted to L.E. 19,990,000 and PACHIN for inks which amounted to L.E. 37,485,000. This information is provided by RNS The company news service from the London Stock Exchange