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Transcript of 2Q
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www.byco.com.pk
Byco Petroleum Pakistan Limited
9th Floor, The Harbour Front, Dolmen City, HC-3, Block-4, Marine Drive, Clifton, Karachi-75600, Pakistan
Tel: (+92 21) 111 222 081 Fax: (+92 21) 111 888 081
Imagined. Realized.
HALF-YEAR ENDING | 31 DECEMBER 2014
Byco Petroleum Pakistan Limited
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Contents
Company Information 02
Directors’ Review 03
Auditors’ Report to the Members on 04
Review of Interim Financial Information
Unconsolidated Condensed Interim Balance Sheet 05
Unconsolidated Condensed Interim Profit & Loss Account 06
Unconsolidated Condensed Interim Statement of Other 07
Comprehensive Income
Unconsolidated Condensed Interim Cash Flow Statement 08
Unconsolidated Condensed Interim Statement of 09
Changes In Equity
Notes to the Unconsolidated Condensed Interim 10
Financial Information
CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENT
Consolidated Condensed Interim Balance Sheet 20
Consolidated Condensed Interim Profit & Loss Account 21
Consolidated Condensed Interim Statement of Other 22
Comprehensive Income
Consolidated Condensed Interim Cash Flow Statement 23Consolidated Condensed Interim Statement of Changes 24In Equity
Notes to the Consolidated Condensed Interim 25Financial Information
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Board of Directors
Hamid Imtiaz Hanfi
Chairman
Muhammad Raza Hasnani
Vice Chairman
Muhammad Mujtaba Jafarey
Chief Executive Officer
Ovais Mansoor Naqvi
Director
Philip Harris
Director
Diana Brush
Director
Richard Legrand
Director
Javed Akbar
Director
Company Secretary
Shahana Ahmed Ali
Audit Committee
Philip Harris
Muhammad Raza Hasnani
Diana Brush
Strategy &RiskManagement Committee
Muhammad Raza Hasnani
Hamid Imtiaz Hanfi
Diana Brush
Services & StakeholdersCommittee Muhammad Raza Hasnani
Hamid Imtiaz Hanfi
Diana Brush
Chief Financial Officer
Muhammad Imran Sheikh
Legal Counsel
Shahana Ahmed Ali
Auditors
Ernst & Young Ford Rhodes
Sidat Hyder
Chartered Accountants
Bankers
Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Bank Islami Pakistan Limited
Barclays Bank Plc, Pakistan
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank
Limited
JS Bank Limited
KASB Bank Limited
MCB Bank Limited
National Bank of Pakistan
NIB Bank Limited
Silk Bank Limited
Standard Chartered Bank(Pakistan) Limited
Soneri Bank Limited
Summit Bank Limited
Sindh Bank Limited
The Bank of Khyber
The Bank of Punjab
United Bank Limited
Shares Registrar
FAMCO Associates (Pvt)
Limited
8-F, Next to Hotel
Faran,Nursery, Block – 6,
P.E.C.H.S.,
Shahrah-e-Faisal, Karachi
Tel: (92 21) 3438 0101
3438 0102
Fax: (92 21) 3438 0106
Registered Office
9th Floor, The Harbour Front,
Dolmen City, HC-3,
Block4, Marine Drive,
Karachi-75600, Clifton,
Pakistan
Tel: (92 21) 111 222 081Fax: (92 21) 111 888 081
Website
www.byco.com.pk
Company Information
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In the name of Allah the Most Merciful andthe Most Benevolent.
The Directors of your Company are pleasedto present a brief review of the financialresults and operations of your Company forthe second quarter and half year ended 31st December, 2014.
The current half year witnessed a significantdecline in crude and product pricescompared to the corresponding quarterwhere there was generally an increasingtrend in prices. During the current sixmonths period, crude oil and product priceswitnessed a decrease of approximately 46%compared to an increase of about 11%during same period last year. This decliningprice trend continued post December 2014and the prices further dropped by 22% inJanuary 2015. As a result of this decliningprice, the industry suffered significant
inventory losses, which your company wassubstantially able to shield itself from bytaking proactive measures.
In current period, Pak Rupee depreciated byalmost 2% against the US$ whereas incorresponding period a significant decline ofalmost 9% was witnessed.
Despite the above challenges, yourCompany was able to increase its salesvolume by 22% from last year. During the
period, the refinery achieved through put of3.3million barrels compared to 2.8millionbarrels in corresponding period, a growth of18%. However, this increase in volume waspartly offset by the decline in prices. The netsales for the period under review wererecorded at Rs. 44.84 billion depicting anincrease of 9.5% from same period last yearand the Company earned agross profit ofRs. 569 million in the current period.
To achieve the above sales growth, theCompany further augmented its supply chainfunction and focused on selling more motorgasoline and diesel through its own retailstations and furnace oil directly to theIndependent Power Producers, includingfurnace oil to Pakistan State Oil CompanyLimited for onward supplies to Hub PowerCompany Limited. There is a significant
increase in selling and distribution expensesmainly on account of additional transportationcost for delivery of the products to ourcustomers. However, this additional transportcost has been invoiced and is recoverablethrough IFEM for motor gasoline and dieselsales through our retail sites and through ourCustomers for furnace oil.The administrativeexpenses have been strictly controlled andremained well within the budget.
The Company did incur a net loss after tax ofRs. 1.6billion, attributable entirely to thefinancial charges most of which representsmarkup incurred on long term loan which isnot currently due or payable.These chargesare payable after the settlement of theprincipal amount and hence, predominantlyfinancial charges have not affected the cashflows of the Company.
The Single Buoy Mooring (SBM) project of
our subsidiary company, Byco TerminalsPakistan Limited (BTPL), operatedsuccessfully throughout the period andcontinued to provide support foreconomical crude oil imports for theRefinery as well as assistance for import offinished petroleum product in the shape offurnace oil. This most recent development isexpected to lead to increase in revenues ofthe company.
The Board wishes to express appreciation
and place on record its gratitude for theco-operation extended to your Companyby Government of Pakistan and strategicpartners including financial institutions,vendors, suppliers, customers andshareholders of your Company.
We would also like to thank our dedicatedemployees for their commitment towardssustainable operations during these tryingtimes.
For and on behalf of the Board of Directors
Chief Executive OfficerKarachiFebruary 23, 2015
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Auditors’ Report to the Members onReview of Interim Financial Information
Introduction
We have reviewed the accompanying condensed interim balance sheet of Byco PetroleumPakistan Limited (the Company) as at 31 December 2014, related condensed interim profitand loss account, condensed interim statement of comprehensive income, condensedinterim statement of cash flows and condensed interim statement of changes in equity andnotes to the accounts (here-in-after referred to as “interim financial information”) for thesix-month period then ended. Management is responsible for the preparation and fairpresentation of this interim financial information in accordance with approved accountingstandards as applicable in Pakistan for interim financial reporting. Our responsibility is toexpress a conclusion on this interim financial information based on our review.
Scope of ReviewWe conducted our review in accordance with International Standard on Review Engagements2410, "Review of Interim Financial Information Performed by the Independent Auditor of theEntity." A review of interim financial information consists of making inquiries, primarily ofpersons responsible for financial and accounting matters, and applying analytical and otherreview procedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing and consequently does not enable us toobtain assurance that we would become aware of all significant matters that might beidentified in an audit. 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 theaccompanying interim financial information is not prepared, in all material respects, inaccordance with approved accounting standards as applicable in Pakistan for interim financialreporting.
Emphasis of Matter
We draw attention to note 2 to the unconsolidated condensed interim financial statementswhich indicates that the Company has incurred net loss after taxation of Rs. 1,662.680 millionduring the six months period ended 31 December 2014, and as of that date, its accumulatedlosses amounted to Rs. 25,471.019 million. These conditions, along with other matters as setforth in note 2, indicate existence of material uncertainty which may cast significant doubtabout the Company's ability to continue as going concern. However, unconsolidated
condensed interim financial statements have been prepared on going concern basis based onthe mitigating factors, as more fully explained in note 2 to the unconsolidated condensedinterim financial statements. Our conclusion is not qualified in respect of this matter.
Other Matters
The condensed interim financial information of the Company for the six months ended 31December 2013 and the annual financial statements for the year ended 30 June 2014 werereviewed and audited by another firm of Chartered Accountants, whose review report dated30 June 2014 and audit report dated 16 December 2014 expressed an unmodified conclusionand unmodified opinion on those statements respectively.
Chartered AccountantsReview Engagement PartnerRiaz A. Rehman ChamdiaDate: 23 February 2015Place: Karachi
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