3rd Quarter Results

19th May 2008 08:27



Paints and Chemical Industries Company "Pachin"

S.A.E.

The Consolidated Financial Statements

Together with the Auditor's Report

For the Period Ended March 31, 2008

Review Report

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

We have reviewed the accompanying consolidated balance sheet of Paints and Chemical Industries Company as of March 31, 2008, and the related statements of consolidated income, cash flows and change in equity for the period then ended. 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.

The attached financial statements have been prepared to be presented to the General Authority for Capital Market and the Financial Securities for Stock Market, in execution of Law No. 95 for 1992 and its executive regulation and the General Authority for Capital Market Decree concerning this issue. 

We conducted our review in accordance with the Egyptian Standard on Auditing 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 company 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.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not give a true and fair view in all material respects in accordance with Egyptian Accounting Standards.

Cairo, May 13, 2008

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		31/3/2008		30/6/2007		31/3/2008		30/6/2007
			EGP		EGP		EGP		EGP
Non-Current Assets
Property, plant and equipment (Net)	(2b, 4)		185 428 006		185 757 691		18 099 963		17 872 853
Projects under construction	(2c, 5)		70 169 466		23 895 711		1 124 397		1 355 538
Investment in subsidiary companies	(2f, 6)		--		--		232 387 000		222 391 000
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			272 388 378		226 444 308		268 402 266		258 410 297
Current Assets
Inventories (Net)	(2g, 9, 16b)		172 607 205		161 531 134		86 705 312		78 992 347
Letters of Credit			5 883 571		2 079 372		1 366 322		2 006 017
Accounts receivable (Net)	(2h, 10, 16b)		42 388 551		40 084 836		33 593 561		33 107 914
Notes receivable (Net)	(11, 16b)		20 123 604		25 475 311		5 419 411		5 948 740
Due from subsidiary companies	(12)		--		--		1 093 441		403 144
Other debit balances	(13)		53 641 164		43 728 069		44 987 651		119 873 308
Investments for trading	(2i, 14)		23 195 929		28 992 814		300 117		354 899
Cash and cash equivalents	(2j, 15)		72 775 748		85 611 100		23 847 197		30 065 484
Total Current Assets			390 615 772		387 502 636		197 313 012		270 751 853
Current Liabilities
Provisions	(16,a)		37 740 505		39 735 309		36 048 593		37 354 702
Banks - overdraft	(17)		41 598 968		7 996 320		14 082 055		1 811 282
Accounts and notes payable	(2l, 18)		38 079 433		35 241 518		8 643 525		9 852 408
Due to El-Obour for Paint	(19)		--		--		12 758 223		7 832 869
Other credit balances	(20)		47 735 282		37 017 363		16 736 599		18 451 483
Total Current Liabilities			165 154 188		119 990 510		88 268 995		75 302 744
Working Capital			225 461 584		267 512 126		109 044 017		195 449 109
Total Investment finianced by :			497 849 962		493 956 434		377 446 283		453 859 406
Share Capital
Share capital	(21)		200 000 000		200 000 000		200 000 000		200 000 000
Reserves	(22)		191 420 791		182 311 140		170 627 297		166 415 698
Retained earnings			16 838 942		6 824 029		3 951 441		2 308 839
Profit for the period / year			85 753 827		100 884 170		1 964 655		84 231 979
Total Share Capital			494 013 560		490 019 339		376 543 393		452 956 516
Minority Interest			171 913		168 045		--		--
Total Sharholders Equity and minority intrest			494 185 473		490 187 384		376 543 393		452 956 516
Long-term liabilities	(23)		3 664 489		3 769 050		902 890		902 890
Total Financing of Working Capital and Non-Current Assets			497 849 962		493 956 434		377 446 283		453 859 406
- The accompanying notes from (1) to (27), form an integral part of the financial statements.
Financial Controller		Managing Director					Chairman of the Board
- Auditor's Report attached.

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.

Consolidated Income Statement

From July 1, 2007 till March 31, 2008

			Consolidated								Pachin
	Notes		Period fom 1/1/2008 to 31/3/2008		Period fom 1/7/2007 to 31/3/2008		Period fom 1/1/2007 to 31/3/2007		Period fom 1/7/2006 to 31/3/2007		Period fom 1/1/2008 to 31/3/2008		Period fom 1/7/2007 to 31/3/2008		Period fom 1/1/2007 to 31/3/2007		Period fom 1/7/2006 to 31/3/2007
			EGP		EGP		EGP		EGP		EGP		EGP		EGP		EGP
Net sales	(3)		135 629 375		434 921 801		112 752 201		376 453 637		42 799 092		127 435 501		35 817 700		109 769 781
Cost of sales			(111 998 143)		(341 474 331)		(91 949 145)		(294 194 546)		(40 434 864)		(119 665 611)		(35 159 314)		(104 381 477)
Gross Profit			23 631 232		93 447 470		20 803 056		82 259 091		2 364 228		7 769 890		658 386		5 388 304
General and administrative expenses			(3 783 991)		(10 028 159)		(2 617 195)		(8 769 027)		(2 856 172)		(7 423 166)		(1 902 094)		(6 669 445)
Provision used			--		--		(3 000 000)		(3 000 000)		--		--		(3 000 000)		(3 000 000)
Allowance for attending the Board of Directors			( 63 500)		( 200 000)		( 20 000)		( 161 200)		( 42 500)		( 96 000)		( 9 000)		( 86 000)
Profit from Operations			19 783 741		83 219 311		15 165 861		70 328 864		( 534 444)		250 724		(4 252 708)		(4 367 141)
Interest expenses			( 735 013)		(1 497 599)		( 799 795)		(2 130 629)		( 251 493)		( 624 465)		( 333 756)		( 789 206)
Profit on sale of investments			( 44 553)		1 254 943		413 730		3 093 993		( 44 553)		814 302		6 781		978 313
Gain on revaluation of trading investment			161 200		1 139 748		--		--		6 780		20 341		--		--
Investment income			6 780		20 341		( 79 673)		20 340		1 940		178 086		--		--
Interest income			715 349		2 610 012		326 006		2 020 319		228 730		822 124		151 875		988 287
Capital gain			26 750		26 750		--		73 050		26 750		26 750		--		73 050
Other income			447 967		1 262 485		114 889		296 368		356 426		1 007 656		104 688		283 686
Provisions no longer required			--		--		3 000 000		3 000 000		--				3 000 000		3 000 000
Losses from foreign currency translation exchange			( 100 028)		(2 240 124)		( 60 940)		( 429 097)		81 675		( 530 863)		( 15 903)		( 89 148)
Profit before taxes			20 262 193		85 795 867		18 080 078		76 273 208		( 128 189)		1 964 655		(1 339 023)		77 841
Income tax			--		--		--		--		--		--		--		--
Deferred taxes			--		--		--		--		--		--		--		--
Profit after Tax			20 262 193		85 795 867		18 080 078		76 273 208		( 128 189)		1 964 655		(1 339 023)		77 841
Minority interest			( 10 276)		( 42 040)		( 9 713)		( 38 104)		--		--		--		--
Profit after tax and minority interest			20 251 917		85 753 827		18 070 365		76 235 104		( 128 189)		1 964 655		(1 339 023)		77 841
- The accompanying notes rom (1) to (27), form an integral part of the financial statements.

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.
Consolidated Cash Flows Statement
From July 1, 2007 till March 31, 2008
		Consolidated				Pachin
		31/03/2008		31/3/2007		31/03/2008		31/3/2007
	Notes	EGP		EGP		EGP		EGP
Cash Flows from Operating Activities
Net Profit before Tax and minoirty interst		85 753 827		76 273 208		1 964 655		77 841
Adjustments to Reconcile Net Profit to Net  Cash Provided from Operating Activities
Depreciation		7 133 428		7 058 781		1 574 644		1 533 503
Capital gain		( 26 750)		( 73 050)		( 26 750)		( 73 050)
Gain on revaluation of trading investment		(1 139 748)		--		( 178 086)		--
Profit on the sale of investments		(1 254 943)		(3 093 993)		( 814 302)		( 957 973)
Provision utilized during the period		(2 006 550)		(3 000 000)		(1 317 855)		(3 000 000)
Provision used		--		3 000 000		--		3 000 000
Operating Profit before Working Capital Changes		88 459 264		80 164 946		1 202 306		580 321
(Increase) decrease in receivables and other debit balances		(5 775 565)		(5 661 807)		74 360 353		61 113 495
(Increase) in inventories and letter of credit		(15 925 718)		(78 320 348)		(7 073 270)		(29 535 105)
Increase in creditors and other credit balances		13 460 969		20 738 572		1 998 776		11 124 093
Net Cash Provided from Operating Activities		80 218 950		16 921 363		70 488 165		43 282 804
Cash Flows from Investing Activities
Purchase of investments for trading		(145 950 867)		(142 977 137)		(79 470 490)		(34 858 405)
Proceeds from the sale of investments for trading		154 142 443		213 416 741		80 408 095		68 652 827
Purchase of fixed assets and other long-term assets		(53 190 773)		(26 126 849)		(1 647 343)		(16 998 130)
Purchase of investments in subsidiary (Pachin for Inks)		--		--		(9 996 000)		--
Proceeds from the sale of fixed assets		140 025		90 097		103 480		74 847
Net Cash (used in) Provided from Investing Activities		(44 859 172)		44 402 852		(10 602 258)		16 871 139
Cash Flows from Financing Activities
Proceeds of banks overdraft		33 602 648		--		12 270 773		--
Dividends paid		(81 797 778)		(70 022 591)		(78 374 967)		(67 164 605)
Net Cash (used in) Financing Activities		(48 195 130)		(70 022 591)		(66 104 194)		(67 164 605)
Net (decrease) in cash and cash equivalents during the period		(12 835 352)		(8 698 376)		(6 218 287)		(7 010 662)
Net cash and cash equivalents at beginning of the period	(15)	85 611 100		54 617 485		30 065 484		23 425 741
Net cash and cash equivalents at end of the period	(15)	72 775 748		45 919 109		23 847 197		16 415 079
- The accompanying notes from (1) to (27), form an integral part of the financial statements.

PAINTS AND CHEMICAL INDUSTRIES COMPANY "PACHIN" S.A.E.
Cosolidated Changes in Shareholders' Equity Statement
From July 1, 2007 till March 31, 2008

	Share		Reserves		Retained		Profit for the		Minority Interest		Total
	Capital				Earnings		Year / Period
	EGP		EGP		EGP		EGP		EGP		EGP
Balance as of June 30, 2006	200 000 000		174 508 002		3 063 605		81 328 926		151 999		459 052 532
Transferred to reserves	--		7 803 138		--		(7 803 138)		--		--
Transferred to retained earnings	--		--		3 760 424		(3 760 424)		--		--
Dividends	--		--		--		(69 765 364)		( 32 799)		(69 798 163)
Net profit as of June 30, 2007	--		--		--		100 884 170		48 845		100 933 015
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 March 31, 2008	--		--		--		85 753 827		42 040		85 795 867
Balance as of March 31, 2008	200 000 000		191 420 791		16 838 942		85 753 827		171 913		494 185 473
- The accompanying notes from (1) to (27), form an integral part of the financial statements.

Paints and Chemical Industries Company "Pachin"

(S.A.E.)

Notes to the Financial Statements

As of March 31, 2008

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 also, 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 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, 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.

f. 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 perpetual 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.

g. 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.

h. 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. 

i. Cash and Cash Equivalents

Cash and cash equivalents are stated in the balance sheet at nominal value. 

j. 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.  

k. Accounts Payable 

Accounts payable, stated at the nominal value, are recorded with the value of goods and services provided by others and the invoice.

l. 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.

m. Revenue Recognition

n. Borrowing Cost

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

o. 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. 

p. 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 and in light of the tax assessments. 

Deferred tax is recognized due to 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.

q. 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.

r. Accounting Estimates

The preparation of financial statements in conformity with 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 to be 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	49 519	386 894	8 160	79 408
Inks	2 076	44 829	2 076	44 829
Animal Extract Product	666	3 198	666	3 198
		434 921		127 435

4. Property, Plant and Equipment

Consolidated 

	Land	Buildings	Machinery and Equipments	Vehicles	Tools	Furniture and Office Equipments	Total
	EGP	EGP	EGP	EGP	EGP	EGP	EGP
Cost
July 1, 2007	40 149 216	80 453 994	114 946 493	13 979 727	12 476 271	12 214 191	274 219 892
Additions	--	161 549	3 562 675	1 183 277	1 097 961	911 555	6 917 017
Disposals	--	--	(83 257)	(591 636)	(101 960)	(27 545)	(804 398)
Cost as of March 31, 2008	40149 216	80 615 543	118 425 911	14 571 368	13 472 272	13 098 201	280 332 511
Accumulated Depreciation
July 1, 2007	--	(18 143 464)	(527 298 46)	(628 777 9)	(6 371 368)	(214 871 7)	(201 462 88)
Depreciation charge	--	(1 544 567)	(3 343 609)	(936 984)	(638 898)	(669 370)	(7 133 428)
Disposals	--	--	71 056	591 578	3 572	24 918	691 124
As of March 31, 2008	--	(19 688 031)	(49 571 080)	(10 123 034)	(7 006 694)	(8 515 666)	(94 904 505)
NBV @ March 31, 2008	40 149 216	60 927 512	68 854 831	4 448 334	6 465 578	4 582 535	185 428 006
NBV @ June 30, 2007	40 149 216	62 310 530	68 647 966	4 202 099	6 104 903	4 342 977	185 757 691

Pachin Company

	Land	Building	Machinery and Equipments	Vehicles	Tools	Furniture & office equipment	Total
	EGP	EGP	EGP	EGP	EGP	EGP	EGP
Cost
July 1, 2007	173 143	19 694 750	29 131 798	6 254 515	4 591 171	6 532 271	66 377 648
Additions	--	93 584	427 907	340 155	700 267	316 570	1 878 483
Disposals	--	--	(83 257)	(498 078)	(66 980)	(25 792)	(674 107)
Cost of March 31, 2008	173 143	19 788 334	29 476 448	6 096 592	5 224 458	6 823 049	67 582 024
Accumulated Depreciation
July 1, 2007	--	(9 510 605)	(24 930 814)	(5 500 796)	(3 425 760)	(5 136 820)	(48 504 795)
Depreciation charge	--	(383 731)	(542 772)	(231 777)	(184 394)	(231 970)	(1 574 644)
Disposals	--	--	71 056	498 078	3 572	24 672	597 378
As of  March 31, 2008	--	(9 894 336)	(25 402 530)	(5 234 495)	(3 606 582)	(5 344 118)	(49 482 061)
NBV @ March 31, 2008	143 173	9 893 998	4 073 918	862 097	1 617 876	1 478 931	18 099 963
NBV @ June 30, 2007	173 143	10 184 145	4 200 984	753 719	1 165 411	1 395 451	17 872 853

5. Projects under Construction

	Consolidated				Pachin
	31/3/2008		30/6/2007		31/3/2008		30/6/2007
	EGP		EGP		EGP		EGP
Machinery and equipments	2 713 541		1 982 429		770 481		888 659
Buildings	44 508 487		11 611 533		--		63 469
Tools and equipments	468 280		226 987		234 780		226 987
Furniture	9 920		80 605		--		70 685
Vehicles	3 676		3 732		--		--
Software and programs	2 803 315		2 797 815		44 500		44 500
Assets under construction	50 507 219		16 703 101		1 049 761		1 294 300
Letter of credit	15 777 161		1 536 620		--		--
Capital expenditure	3 885 086		5 655 990		74 636		61 238
Total	70 169 466		23 895 711		1 124 397		1 355 538

 

6. Investment in Subsidiary Companies

Company Name	Capital EGP	Ownership %	Ownership amount	Paid %	31/3/2008 Paid amount EGP	30/6/2007 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. 66%	49 980 000	65%	32 487 000	22 491 000
					232 387 000	222 391 000

These companies are not listed in the stock market.

7. Available for sales Investments  

	Consolidated		Pachin
	31/3/2008 EGP	30/6/2007 EGP	31/3/2008 EGP	30/6/2007 EGP
Governmental Bonds at the National Investment Bank	906 774	774 906	774 906	774 906

8. Other Long-Term Assets

Other long-term assets as of March 31, 2008 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
	31/3/2008		30/6/2007		31/3/2008		30/6/2007
	EGP		EGP		EGP		EGP
Raw materials and packaging	128 988 913		128 946 404		71 267 754		65 156 527
Finished products	26 956 044		19 202 648		7 620 953		7 032 009
Fuel and spare parts	7 561 301		7 181 957		3 658 784		3 716 106
Work in-progress	7 073 411		5 001 140		2 247 532		2 178 462
Consignment goods	1 078 640		568 823		1 078 640		568 823
Inventories for the purpose of resale	641 754		161 922		641 754		161 922
Scrap	307 142		468 240		189 895		178 498
	172 607 205		161 531 134		86 705 312		78 992 347

The above-mentioned figures are net of provisions (Refer to Note No. 16).

10. Accounts Receivable

	Consolidated			Pachin
	31/3/2008	30/6/2007		31/3/2008	30/6/2007
	EGP	EGP		EGP	EGP
Accounts receivable	50 271 312	47 979 343		40 344 461	39 870 560
Less:
Provision for doubtful debts	(7 882 761)	(7 894 507)		(6 750 900)	(6 762 646)
	42 388 551	40 084 836		33 593 561	33 107 914

11. Notes Receivable

Notes receivable as of March 31, 2008 amounted to EGP 30 061 604 after the deduction of the provision amounting to EGP 9 938 000 its maturity date is due after one year. 

12. Due from Subsidiary (Pachin for Inks)

The balance of this account amounted to EGP 1 093 441, which represents the amounts paid by the Holding Company on behalf of the mentioned Company. 

13. Other Debit Balances

	Consolidated			Pachin
	31/3/2008	30/6/2007		31/3/2008	30/6/2007
	EGP	EGP		EGP	EGP
Accrued income	427 207	483 449		140 481	81 234 845
Suppliers debit balances	3 934 137	2 251 535		2 352 609	1 060 510
Employees loans	754 580	1 495 720		754 580	1 495 720
Deposits with others	2 172 433	1 976 505		1 327 033	1 416 577
Corporate tax*	28 857 954	24 857 954		954 857 28	24 857 954
Withholding tax	7 202 470	6 649 387		7 059 212	6 506 128
Other debit balances	10 292 383	6 013 519		4 495 782	3 301 574
	53 641 164	43 728 069		44 987 651	119 873 308

* This balance represents:

14. Investments for Trading

	Consolidated			Pachin
	31/3/2008	30/6/2007		31/3/2008	30/6/2007
	EGP	EGP		EGP	EGP
Investment Certificates	23 195 929	28 992 814		300 117	354 899
	23 195 929	28 992 814		300 117	354 899

15. Cash and Cash Equivalents

	Consolidated			Pachin
	31/3/2008	30/6/2007		31/3/2008	30/6/2007
	EGP	EGP		EGP	EGP
Cash on hand	4 034 613	30 884		1 982 132	--
Bank current accounts	15 005 826	7 904 337		2 543 646	3 054 586
Bank time deposits	48 071 970	71 662 114		17 313 330	23 598 040
Checks under collection*	5 663 339	6 013 765		2 008 089	3 412 858
	72 775 748	85 611 100		23 847 197	30 065 484

* Represents outstanding checks with due dates before 31/3/2008, collected after this date.

16. Provisions

	Balance  as of  1/7/2007	Provision  Established  during  the period	Provision  No longer required  during  the period	Provision utilized during the period	Balance  as of  31/3/2008
	EGP	EGP	EGP	EGP	EGP
A- Provisions-Current Liabilities
Provision for tax disputes	32 149 283	--	--	(1 068 322)	31 080 961
Provision for claims	7 003 321	--	--	(926 482)	6 076 839
Other provisions	582 705	--	--	--	582 705
Total provisions (Current Liabilities)	39 735 309	--	--	(1 994 804)	37 740 505
B- Provisions-Current Assets
Accounts receivable provision	7 894 507	--	--	(11 746)	7 882 761
Notes receivable provision	9 938 000	--	--	--	9 938 000
Raw material provision	517 961	--	--	--	517 961
Finished goods provision	798 649	--	--	--	798 649
Slow moving and obsolete spare parts provision	481 533	--	--	--	481 533
	59 365 959	--	--	(2 006 550)	57 359 409

17. Banks Overdraft

Banks overdraft represent credit facilities that the group has obtained from various banks as of  March 31, 2008 amounting to EGP 41 598 968. These facilities are secured by time deposits.

18. Accounts and Notes Payable

	Consolidated			Pachin
	31/3/2008	30/6/2007		31/3/2008	30/6/2007
	EGP	EGP		EGP	EGP
Accounts payable	34 707 698	30 778 933		8 131 998	8 814 390
Notes payable	3 371 735	4 462 585		511 527	1 038 018
	38 079 433	35 241 518		8 643 525	9 852 408

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

The balance of this account amounting to EGP 12 758 223, represents the ordinary operations results between Paints and Chemicals Industries Company (Pachin) and El-Obour for Paints and Chemicals Industries Company.

20. Other Credit Balances

	Consolidated		Pachin
	31/3/2008	30/6/2007	31/3/2008	30/6/2007
	EGP	EGP	EGP	EGP
Accrued expenses	7 383 531	8 360 701	6 654 255	7 548 292
Accounts receivable – credit balances	19 273 371	11 584 415	3 539 253	3 219 161
Sales tax	1 401 984	5 915 594	--	1 238 725
Fixed assets - creditors	6 238 635	845 708	90 687	80 835
Deposit to others	4 664 617	2 920 599	870 941	816 058
Employees share in profit	42 242	39 431	242 42	39 431
Withholding tax	462 964	430 943	204 452	239 944
Current portion of long- Term liabilities *	207 687	428 658	--	--
Other employees benefits	4 082 371	4 082 371	4 082 371	4 082 371
Income tax	--	368 139	--	--
Other creditors	3 977 880	2 040 804	1 252 398	1 186 666
	47 735 282	37 017 363	16 736 599	18 451 483

* Refer to Note No. "23-A"

21. 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
	31/3/2008	30/6/2007	31/3/2008	30/6/2007
	EGP	EGP	EGP	EGP
Legal Reserve	112 822 380	103 702 327	484 018 92	87 806 885
Reserve invested in treasury bonds	905 774	774 905	905 774	774 905
Fixed assets reserve	899 290 6	6 290 899	899 290 6	6 290 899
Other Reserves	71 532 607	71 543 009	009 543 71	71 543 009
	191 420 791	182 311 140	297 627 170	166 415 698

23. Long-Term Liabilities 

The long-term liabilities are represented as follows: 

The sales tax installment on the imported assets which amounted to EGP 428 658 (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 with an amount of EGP 453 188.

The deferred tax liability amounting to EGP 2 782 643, resulted from the difference between the books depreciations rates and the tax depreciations rates (Refer to Note No. "2Q").

24. Contingent Liabilities

The uncovered portion of the Letters of Credit amounted to EGP 4 640 013 as of March 31, 2008.

25. Capital Commitments 

26. Managing the Risks Related to Financial Instruments 

 

27. Tax Position

Corporate Income Tax (Paints and Chemicals Industries Company)

Corporate Income Tax (El-Obour for Paints and Chemicals Industries Company)

Corporate Income Tax (Pachin for Inks)

The Company is subject to the provisions of Law No. 8 for 1997 and its executive regulations. The Company did not start its operation yet.

ENDQRTEAESPFSLPEFE

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