Lay out A - 1 - · PDF fileJCR-VIS Credit Company Limited. Hascol has a strategic License agreement with FUCHS Middle East (FOMEL), an associate of FUCHS Petrolub based in

04 Corporate Information

06 Chairman’s Review

08 Condensed Interim Unconsolidated Financial Information

24 Condensed Interim Consolidated Financial Information

Contents

In 2005, Hascol Petroleum Limited was granted the Oil Marketing License by the Government of Pakistan and ever since, the company has aggressively invested in establishing a countrywide network of over 470 retail fuel stations in four provinces of Pakistan and Azad Jammu and Kashmir under the Hascol brand with further sites planned during the coming year.

The company is all set to jump up a number on the competitive ladder, strategizing its position ahead in terms of market share. The acquisition of 10 retail outlets on the Lahore-Islamabad Motorway has strengthened the company’s backbone to broaden its network and has given the Hascol brand a remarkable boost in Central Punjab and has encouraged the company’s sales volume and profitability.

Over the years, Hascol has constructed storage facilities at Keamari, Daulatpur, Shikarpur, MehmoodKot, Machike and Amangarh with further storages planned at Sahiwal, Kotlajam, Hub and Thalian.

Hascol obtained listing on the Pakistan Stock Exchange in May 2014 and its share

price has appreciated significantly since getting listed in line with company’s growth having received a credit rating of ‘A+/A-1’ (Single A Plus /A-One) from JCR-VIS Credit Company Limited.

Hascol has a strategic License agreement with FUCHS Middle East (FOMEL), an associate of FUCHS Petrolub based in Germany, to represent the brand in Pakistan. The German brand has emerged as a tough competitor in the oil lubricants sector depicting doubling sales volumes year after year. With an estimated cost of USD 20 Million, the company owned Lube Oil Blending Plant is expected to start operations by first half of 2018. Hascol has emerged as a strong competitor for its counterparts in the industry and continues to strengthen its footprints.

Hascol Petroleum Limited is the first OMC to market LPG through its Retail Network for the automotive sector. The company has plans to market LPG for domestic consumers and to develop several Auto gas LPG stations across the country in the coming years to accommodate the ever growing demand for energy.

Chairman Mr. Mumtaz Hasan Khan

Chief Executive OfficerMr. Saleem Butt

DirectorsMr. Paul Anthony Himsworth (Nominee of Vitol Dubai Limited)Mr. Abdul Aziz Khalid (Nominee of Vitol Dubai Limited)Mr. Farooq Rahmatullah Khan Mr. Liaquat AliMr. Najmus Saquib Hameed

Chief Financial OfficerMr. Khurram Shahzad Venjhar

Company Secretary Mr. Zeeshan Ul Haq

Audit CommitteeMr. Najmus Saquib Hameed (Chairman)Mr. Abdul Aziz Khalid (Member)Mr. Liaquat Ali (Member)

Strategy CommitteeMr. Farooq Rahmatullah Khan (Chairman)Mr. Mumtaz Hasan Khan (Member)Mr. Abdul Aziz Khalid (Member)Mr. Saleem Butt (Member)

Human Resource CommitteeMr. Paul Anthony Himsworth (Chairman)Mr. Najmus Saquib Hameed (Member)Mr. Mumtaz Hasan Khan (Member)Mr. Saleem Butt (Member)

AuditorsGrant Thornton Anjum Rahman Chartered Accountants

Page 04QUALITY PERSONIFIEDNine Months Period Ended September 2017

BankersAllied Bank LimitedAl Baraka Bank (Pakistan) LimitedAskari Bank LimitedBank Al Falah Limited Bank Al Habib LimitedBank Islami Pakistan LimitedBank of PunjabFaysal Bank LimitedFirst Women Bank LimitedHabib Metropolitan Bank LimitedHabib Bank LimitedIndustrial and Commercial Bank of China Limited MCB Bank LimitedMeezan Bank LimitedNational Bank of Pakistan Samba Bank LimitedSindh Bank LimitedSoneri Bank LimitedSummit Bank LimitedUnited Bank Limited

Share RegistrarCentral Depository Company of Pakistan Limited

Legal AdvisorMohsin Tayebaly & Co.Corporate Legal Consultants - Barristers & Advocates

Registered OfficeThe Forum, Suite No. 105-106 First Floor, Khayaban-e-Jami Clifton, Block - 9, Karachi, Pakistan Phone: +92-21-35301343-50Fax: +92-21-35301351UAN: 111-757-757E-mail: [email protected]: www.hascol.com

Nine Months Period Ended September 2017 Page 05


In six months review, Hascol’s Board of Directors has set very challenging targets for the year 2017. I am pleased to report that your company is well on track to surpass these aggressive targets. Our sales volumes has increased by 39% over the same period of last year, which is significant achievement considering the increased competition and the difficult business environment. Our Profit After Tax has also increased from Rs. 903.82 million in January-September 2016 to Rs. 1,095.79 million in January-September 2017 which represents an increase of 21%.


We are continuing to maintain our position as a second largest OMC in Pakistan and the largest in Private Sector. For this superb performance, I would like to thank the senior management and all the Hascol employees for executing the Business Plan successfully and hope that they will continue the excellent work so that we end the ongoing year on this high note.During the period under review, our Sahiwal Depot was successfully commissioned, thereby enabling us to target another sales envelop in the heart of Punjab. Daily sales volumes at both MehmoodKot and Sahiwal have exceeded our projections, strengthening our upcountry supply chain and contributing towards our huge volumetric growth.Your company is investing heavily to enhance its supply chain infrastructure, especially upcountry and at Port Qasim jointly with Vitol Tank Terminal International. Construction is proceeding at a fast pace at Thalian, Kotla Jam and at Port Qasim. Simultaneously, our Retail Network is projected to grow to about 500 Retail Outlets by December 2017. These developments will further increase our market share in 2018. Construction of Lube Oil Blending Plant, in technical collaboration with Fuchs, is also going ahead as per schedule and we expect that the project to be completed in first half of 2018.To meet the requirements of all this capital expenditure, Hascol Board has decided to issue 20% right shares at a price of Rs.165. This will ensure that our debt equity ratio remains at a satisfactory level.I take this opportunity to thank the Members of the Board for their continued support and guidance and all the employees of Hascol for their dedication and hard work.

Mumtaz Hasan KhanChairman


for the nine months period ended September 30, 2017


ASSETS Non-current assets Property, plant and equipment 6 11,498,759 8,688,947 Long-term investments 7 2,293,486 1,961,977 Long-term deposits 321,465 288,882 Total non-current assets 14,113,710 10,939,806 Current assets Stock-in-trade 19,611,785 16,477,668 Trade debts 11,342,103 7,871,281 Advances 8 288,108 253,413 Deposits, prepayments and other receivables 9 2,017,938 1,286,748 Cash and bank balances 10,210,185 7,821,070 Total current assets 43,470,119 33,710,180 Total assets 57,583,829 44,649,986 EQUITY AND LIABILITIES Authorized share capital 1,500,000 1,500,000 Shareholders' equity Share capital 1,206,792 1,206,792 Reserves 4,279,796 3,755,346 Total shareholders' equity 5,486,588 4,962,138 Surplus on revaluation of fixed assets - net of tax 1,059,201 1,142,880 LIABILITIES Non-current liabilities Long term finances - secured 10 2,567,494 2,307,749 Liabilities against assets subject to finance lease 417,450 471,731 Deferred taxation - net 11 839,799 594,790 Deferred liability - gratuity 162,050 135,791 Total non-current liabilities 3,986,793 3,510,061 Current liabilities Trade and other payables 12 44,356,075 29,822,758 Mark-up accrued 69,538 91,185 Short term borrowings 1,244,147 3,889,629 Current portion of long term finances 10 896,524 599,079 Current maturity of liabilities against assets subject to finance lease 175,911 148,387 Taxation 309,052 483,869 Total current liabilities 47,051,247 35,034,907 Total liabilities 51,038,040 38,544,968 Total equity and liabilities 57,583,829 44,649,986 Contingencies and commitments 13 The annexed notes from 1 to 22 form an integral part of these condensed interim unconsolidated financial information.

CONDENSED INTERIM UNCONSOLIDATED BALANCE SHEETAS AT SEPTEMBER 30, 2017

Note

UnauditedSeptember 30,

2017

AuditedDecember 31,

2016

(Rupees in thousand)


Chief Executive OfficerSaleem Butt

DirectorNajmus Saquib Hameed

CONDENSED INTERIM UNCONSOLIDATED PROFIT AND LOSS ACCOUNT - UnauditedFOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

Sales - net 152,321,380 92,732,553 57,768,607 33,472,276 Sales tax (28,297,052) (22,578,674) (11,274,918) (6,614,509)Net sales 124,024,328 70,153,879 46,493,689 26,857,767 Other revenue 336,906 107,189 125,016 36,337 Net revenue 124,361,234 70,261,068 46,618,705 26,894,104 Cost of products sold (119,919,075) (66,916,963) (45,226,439) (25,719,569)Gross profit 4,442,159 3,344,105 1,392,266 1,174,535 Operating expenses Distribution and marketing (1,790,338) (1,210,911) (622,488) (438,918)Administrative (466,807) (379,823) (165,725) (121,560) 2,185,014 1,753,371 604,053 614,057 Other income 242,576 151,423 108,901 61,379 Operating profit 2,427,590 1,904,794 712,954 675,436 Finance cost (388,817) (318,851) (126,459) (107,838)Other charges (180,839) (37,237) (158,192) (4,777)Profit before taxation 1,857,934 1,548,706 428,303 562,821 Taxation 14 (762,140) (644,885) (123,116) (271,027)

Profit for the period 1,095,794 903,821 305,187 291,794

Earning per share - basic & diluted Rupees 9.08 7.49 2.53 2.42 The annexed notes from 1 to 22 form an integral part of these condensed interim unconsolidated financial information.

NoteSeptember 30,

2017September 30,

2017September 30,

2016

Nine months period ended Three months period ended

September 30,2016






CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - Unaudited FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

Profit for the period 1,095,794 903,821 305,187 291,794 Other comprehensive income: Items that may be re-classified subsequently to profit and loss account Unrealized gain/ (loss) due to change in fair value of long term investment classified as 'available-for-sale' - net of tax 189,730 (20,057) (231,234) 132,452 Total comprehensive income 1,285,524 883,764 73,953 424,246 The annexed notes from 1 to 22 form an integral part of these condensed interim unconsolidated financial information.

September 30,2017

September 30,2017

September 30,2016


September 30,2016




Balance as at January 01, 2016 1,206,792 1,070,828 684,721 1,566,762 4,529,103 Total comprehensive income for the nine months Profit for the period - - - 903,821 903,821 Other comprehensive income Unrealized loss due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - (20,057) - (20,057)Total comprehensive income for the nine months - - (20,057) 903,821 883,764 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 97,376 97,376 - - (20,057) 1,001,197 981,140 Transaction with owners Final dividend at Rs. 3.5 per share Dec 31, 2015 - - - (422,377) (422,377)Interim dividend at Rs. 3.5 per share Jun 30, 2016 - - - (422,377) (422,377)Total transaction with owners - - - (844,754) (844,754) Balance as at September 30, 2016 1,206,792 1,070,828 664,664 1,723,205 4,665,489 Balance as at January 01, 2017 1,206,792 1,070,828 624,930 2,059,588 4,962,138 Total comprehensive income for the nine months Profit for the period - - - 1,095,794 1,095,794 Other comprehensive income Unrealized gain due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - 189,730 - 189,730 Total comprehensive income for the nine months - - 189,730 1,095,794 1,285,524 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 83,680 83,680 - - 189,730 1,179,474 1,369,204 Transaction with owners Final dividend at Rs. 3.5 per share Dec 31, 2016 - - - (422,377) (422,377)Interim dividend at Rs. 3.5 per share Jun 30, 2017 - - - (422,377) (422,377)Total transaction with owners - - - (844,754) (844,754) Balance as at September 30, 2017 1,206,792 1,070,828 814,660 2,394,308 5,486,588

The annexed notes from 1 to 22 form an integral part of these condensed interim unconsolidated financial information.


CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY - UnauditedFOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

ShareCapital

Share premium

Fairvalue

reserve

Unappropri-ated profit

RevenueReserve

CapitalTotal




Note


CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations 15 9,380,086 3,505,148 Finance cost paid (410,464) (300,964)Dividend paid (422,377) (422,377)Gratuity paid - (790)Taxes paid (668,727) (344,546)Net cash generated from operating activities 7,878,518 2,436,471 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure incurred (3,350,172) (2,029,825)Proceeds from disposal of property, plant and equipment 173,401 - Long term investment made during the period (165,000) - Long term deposits (32,583) (21,511)Net cash used in investing activities (3,374,354) (2,051,336) CASH FLOWS FROM FINANCING ACTIVITIES Lease liability obtained/ (repaid) - net (26,757) (8,898)Long term deposits - 35,279 Long term finance obtained and (repaid) - net 557,190 2,304,440 Net cash generated from financing activities 530,433 2,330,821 Net increase in cash and cash equivalents 5,034,597 2,715,956 Cash and cash equivalents as at the beginning of the period 3,931,441 2,658,492 Cash and cash equivalents as at the end of the period 16 8,966,038 5,374,448 The annexed notes from 1 to 22 form an integral part of these condensed interim unconsolidated financial information.

CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF CASH FLOWS - UnauditedFOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

September 30,2017

September 30,2016

Nine months period ended




1 STATUS AND NATURE OF BUSINESS 1.1 Hascol Petroleum Limited (the Company) was incorporated in Pakistan as a private limited company on March 28, 2001.

On September 12, 2007 the Company was converted into a public unlisted company and on May 12, 2014 the Company was listed on the Pakistan Stock Exchange Limited. The registered office of the Company is situated at Suite No.105-106, The Forum, Khayaban-e-Jami, Clifton, Karachi.

1.2 The Company is engaged in the business of procurement, storage and marketing of petroleum and related products, for

which the Company obtained oil marketing license from Ministry of Petroleum and Natural Resources in the year 2005.

1.3 These condensed interim unconsolidated financial information are separate financial statements of the Company in which investments in subsidiary are accounted for on the basis of direct interest rather than on the basis of reported results. Condensed interim consolidated financial information are prepared separately.

2 BASIS OF PREPARATION 2.1 The condensed interim unconsolidated financial information of the Company for the nine months period ended

September 30, 2017 are unaudited and have been prepared in accordance with the requirements of the International Accounting Standard 34 - 'Interim Financial Reporting' and provisions of and directives issued under the Companies Ordinance, 1984 (the Ordinance). In case where requirements differ, the provisions of or directives issued under the Ordinance have been followed.

2.2 This condensed interim unconsolidated financial information is being submitted to the shareholders in accordance with

section 245 of the Ordinance and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2016.

3 ACCOUNTING POLICIES The accounting policies and the methods of computation adopted in the preparation of this condensed interim

unconsolidated financial information are the same as those applied in the preparation of audited annual financial statements of the Company for the year ended December 31, 2016.

4 ACCOUNTING ESTIMATES AND JUDGEMENTS

4.1 The preparation of this condensed interim unconsolidated financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. However, actual results may differ from these estimates.

4.2 However, management believe that the change outcome of these judgement, accounting estimates and assumptions would not have any material affect on the amounts disclosed in condensed interim financial information of the entity.

5 FINANCIAL RISK MANAGEMENT The financial risk management objectives and policies are consistent with those disclosed in the annual audited

unconsolidated financial statements of the Company as at and for the year ended December 31, 2016.

FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION


6.3 The following assets were disposed off during the period/ year:

September 30, 2017 (unaudited) (154,875) 4,002 (150,873) December 31, 2016 (audited) (refer note 5.1) (60,196) 6,546 (53,650)

CostAccumuladedDepreciation

Net BookValue

6 PROPERTY, PLANT AND EQUIPMENT Operating fixed assets 6.1 5,846,068 5,214,536 Capital work-in-progress 6.4 5,652,691 3,474,411 11,498,759 8,688,947 6.1 Opening book value 5,214,536 4,220,584 Additions during the period / year 6.2 1,171,893 1,446,744 Disposal 6.3 (150,873) (53,650) Depreciation (389,488) (399,142) Closing book value 5,846,068 5,214,536

6.2 Additions to operating assets during the period/ year were as follows:

Owned assets Land - 31,557 Depot building 281,598 80,341 Pump building 96,939 340,335 Tanks and pipelines 151,622 185,597 Dispensing pumps 53,182 22,117 Plant and machinery 20,140 28,920 Electrical, mechanical and fire fighting equipment's 117,664 167,866 Furniture, office equipment and other assets 6,435 69,623 Vehicles 180,968 66,877 Computer auxiliaries 9,777 18,408 918,325 1,011,641 Leased assets Building on leasahold land - 7,526 Dispensing pumps - 35,040 Plant and machinery - 37,320 Electrical, mechanical and fire fighting equipments 20,086 5,185 Vehicles 233,482 350,032 253,568 435,103 1,171,893 1,446,744




Note


2017

AuditedDecember 31,

2016



6.4 Capital work-in-progress Land and office building 590,337 350,283 Depot building 1,567,153 1,251,710 Pump building 386,417 250,137 Plant and machinery 129,473 22,319 Tanks and pipelines 1,536,293 649,540 Dispensing pumps 150,807 96,357 Computer auxilliaries 13,325 7,045 Electrical, mechanical and fire fighting equipment's 606,340 365,453 Furniture, office equipments and other assets 164,610 107,768 Vehicles 124,988 109,971 Borrowing cost capitalized 132,607 123,214 Advances to contractors 250,341 140,614 5,652,691 3,474,411

7 LONG-TERM INVESTMENTS Investment in Subsidiary - unquoted Subsidiary - at cost 7.1 - 75,000 Available for sale Investment at fair value Pakistan Refinery Limited - quoted 7.2 2,053,486 1,886,977 Investment at cost Hascol Terminal Limited - unquoted 7.3 240,000 - 2,293,486 1,961,977

7.1 Unquoted subsidiary company - at cost

CostNote

ProvisionFor

Impairment

September30, 2017

Un-audited

December 31,2016

Audited

Carrying Value




Note


2017

AuditedDecember 31,

2016

Hascombe Terminal Limited - unquoted 7.3 - - - 75,000 Hascombe Lubricant (Private) Limited 7.1.1 30,604 (30,604) - - 30,604 (30,604) - 75,000 7.1.1 Hascombe Lubricants (Private) Limited is wholly owned subsidiary of the Company, incorporated in Pakistan under the Companies

Ordinance,1984. Company holds 9.78 million ordinary shares (December 31, 2016: 9.78 million) of Rs. 10 per share. The Company is involved in the business of blending and producing of lubricating oils, greases and other petroleum products.





Note

7.3.1 Investment in Hascol Terminals Limited (unquoted) amounts to Rs. 240 million (December 31, 2016: Rs. 75 million) representing 15% (December 31, 2016: 62.5%) shares in HTL as at September 30, 2017. The Company has 24 million shares (December 31, 2016: 7.5 million shares) as at September 30, 2017. During the period company subscribed to 16.5 million right shares at Rs. 10 each. These shares are not quoted on an active market and have been carried at cost. The Company provides storage facilities for imported and locally produced petroleum and related products.

8 This includes advance against future issue of shares by Hascol Lubricants (Private) Limited (the subsidiary), VAS LNG

(Private) Limited (an associate) and Hascol Terminals Limited, amounting to Rs. 2.01 million, Rs. 4.02 million and Rs. 236.91 million respectively.

9 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Current portion of lease deposits 32,165 5,740 Prepaid rent 62,470 66,616 Prepaid insurance and others 32,100 14,001 Receivable from oil marketing companies 9.1 44,658 11,328 Receivable against regulatory duty 25,533 25,533 Inland Freight Equalization Margin (IFEM) receivable 1,697,496 1,024,234 Franchise income receivable 69,352 73,304 Price differential claims 9.2 5,083 5,083 Others 9.3 49,081 60,909 2,017,938 1,286,748

9.1 This represents amount receivable from various Oil Marketing Companies (OMCs) on account of share of motor gasoline imported by the Company on behalf of various OMCs.

Note


2017

AuditedDecember 31,

2016

7.2.1 Investment in Pakistan Refinery Limited (quoted) amounts to Rs. 1,172.77 million (December 31, 2016: Rs. 1,172.77 million) representing 13.72% (December 31, 2016: 13.72%) shares in PRL as at September 30, 2017. The Company has 43.24 million shares (December 31, 2016: 43.24 million shares) as at September 30, 2017.

7.2 Investment at fair value

Pakistan Refinery Limited September 30, 2017 7.2.1 1,172,772 880,714 2,053,486 December 31, 2016 1,172,772 714,205 1,886,977

Cost Unrealizedgain

CarryingValue

CostNote

Additionduring the

period

September30, 2017

Un-audited

December 31,2016

Audited

Carrying Value

7.3 Investment at cost Hascol Terminals Limited 7.3.1 75,000 165,000 240,000 -


9.2 This represents amount receivable from the Government of Pakistan (GoP) net of recovery as per fortnightly rates declared by the Ministry of Petroleum and Natural Resources (MPNR). The Company together with other oil marketing companies is actively perusing the matter with the concerned authorities for the early settlement of above claim. The Company considers that the balance amount will be reimbursed by GoP in due course of time.

9.3 This includes Rs. Nil (December 31, 2016: Rs. 4.45 million) receivable from Sigma Motors (Private) Limited.

10.2 This represent privately placed long term islamic certificate (Sukuk) amounting to Rs. 2,000 million, issued by the Company to meet the working capital requirement and expansion plans of the Company. Summit Bank Limited is the trustee while Meezan Bank Limited is acting as shariah structuring advisor for this Sukuk. The Company is in the process of listing of Sukuk over the counter (OTC) on Pakistan Stock Exchange. This facility carries profit at 3 month KIBOR plus 1.5% per annum, payable quarterly. This arrangement is secured against first pari-passu charge over specific depots and retail outlets of the Company inclusive of a 25% margin. The certificates will be redeemed in 20 equal quarterly installments, in arrears, started from April 2017.




10 LONG TERM FINANCES - Secured

Term finance facility 1,695,043 945,007 Sukuk certificate 10.1 1,768,975 1,961,821 3,464,018 2,906,828 Less: Current portion of long term finances Term finance facility 496,524 299,079 Sukuk certificate 400,000 300,000 896,524 599,079 2,567,494 2,307,749 10.1 Sukuk certificate 10.2 1,800,000 2,000,000 Issuance cost Opening (38,179) - Addition - (47,731) Charged to profit and loss account 7,154 9,552 (31,025) (38,179) 1,768,975 1,961,821

Note


2017

AuditedDecember 31,

2016

13 CONTINGENCIES AND COMMITMENTS

13.1 Contingencies 13.1.1 As per the deliberations of the Main Committee of the Oil Companies Advisory Committee (OCAC) held in their

meeting number MCM-168 dated September 20, 2007, the financial costs on outstanding Price Differential Claims (PDC) should be worked and billed to the Government of Pakistan (GOP) through OCAC by the Oil Marketing Companies (OMCs) on a regular basis. Although the Company had billed Rs. 65.97 million (December 31, 2016: Rs. 65.97 million) to the GOP/ OCAC, the management had not accounted for its impact in these financial statements as the inflow of economic benefits, though probable, is not virtually certain.

13.1.2 The Company has filed appeal before the Commissioner Appeals against the Order-in-Original No 06/2017 dated June 07,

2017 for the tax periods from January 2015 to December 2015 passed by Deputy Commissioner Inland Revenue raising tax demand of Rs. 125 million mainly relating to the matter of zero rating of supply of oil to international ships. The Company is confident that the matter will be decided in its favor.





11 DEFERRED TAXATION - net

This comprises the following: Taxable temporary difference arising in respect of : Accelerated depreciation (467,003) (354,233) Assets under finance lease (159,736) (129,683) Revaluation of fixed assets (453,943) (513,467) Exchange gain - (1,797) Surplus on remeasurement on investment (66,054) (89,276) Deductible temporary difference arising in respect of : Liabilities against assets subject to finance lease 176,497 182,677 Provision for : - retirement benefit 48,202 40,718 - doubtful debts 2,348 2,358 - franchise income 8,135 8,168 Investments in subsidiary 9,103 9,140 Turnover tax 62,652 250,605 (839,799) (594,790) 12 TRADE AND OTHER PAYABLES Trade creditors 35,042,982 22,258,817 Payable to cartage contractors 3,570,894 2,445,673 Advance from customers 4,402,715 4,253,932 Dealers' and customers' security deposits 223,050 170,000 Accrued liabilities 13,698 6,153 Other liabilities 680,359 688,183 Dividend payabale 422,377 - 44,356,075 29,822,758


2017

AuditedDecember 31,

2016


Note




Commitments in respect of capital expenditure contracted for but not yet incurred are as follows:

Property, plant and equipment 727,148 758,237 Commitments for rental of assets under operating lease agreements / ijarah contracts as at September 30, 2017

amounted to Rs. 1,865 million (December 31, 2016: Rs. 1,984 million) as follows:

Not later than one year 178,634 173,461 Later than one year and not later than five years 632,478 642,427 Later than five years 1,054,067 1,167,834 1,865,179 1,983,722

14 TAXATION Current 429,291 435,362 Prior period 64,619 28,610 Deferred 268,230 180,913 762,140 644,885 15 CASH GENERATED FROM OPERATIONS Profit before taxation 1,857,934 1,548,706 Adjustment for: Depreciation and amortization 389,488 288,747 Provision for gratuity 26,259 20,631 Gain on sale of fixed assets (22,528) - Finance cost 388,817 318,851 Changes in working capital 15.1 6,740,116 1,328,213 9,380,086 3,505,148


2017

AuditedDecember 31,

2016


2017

AuditedDecember 31,

2016


2017


2016

13.2 Commitments The facility for opening letters of credit (LCs) acceptances as at September 30, 2017 amounted to Rs. 42,425 million

(December 31, 2016: Rs. 30,550 million) of which the amount remaining unutilized as at that date was Rs. 4,580 million (December 31, 2016: Rs. 3,631 million)

(Rupees in thousand)FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017


Nature of relationship Nature of transaction Associated companies Sigma Motors (Private) Limited Office rent income 2,818 5,073 Staff retirement benefits/ contribution funds Provident fund Contribution 17,109 11,327 Gratuity fund Contribution 26,259 20,631 Key management personnel Key management personnel Salaries and benefits 66,588 54,419 Director's Fee Fee for attending meeting 5,650 3,075 Other related parties Other related parties Consultancy services 11,400 14,508

Balances

Associated Companies Sigma Motors (Private) Limited Other receivable - 4,458

All transactions with related parties have been carried out on arm's length basis.

Expenses recovered from / charged by related parties are based on actual.


2017

AuditedDecember 31,

2016



2017


2016

15.1 Changes in working capital

(Increase) / decrease in current assets Stock-in-trade (3,134,117) (716,151) Trade debts (3,470,822) (1,736,758) Loans and advances - considered good (34,695) (6,881) Sales tax receivable - (216,337) Deposits, prepayments and other receivables (731,190) (604,481) (7,370,824) (3,280,608) Increase/ (decrease) in current liabilities Trade and other payables 14,110,940 4,608,821 6,740,116 1,328,213

16 CASH AND CASH EQUIVALENTS Cash and bank balances 10,210,185 6,254,448 Finances utilized under markup arrangements - secured (1,244,147) (880,000) 8,966,038 5,374,448

17 RELATED PARTY TRANSACTIONS AND BALANCES Transactions entered into and balances outstanding with the related parties are as follows:





Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly. The Company considers its Executive Director and Executives to be key management personnel.

18 OPERATING SEGMENTS

- These financial statements have been prepared on the basis of a single reportable segment. - Sales from petroleum products represents 99.7 % (2016: 99.7%) of total revenues of the Company. - Out of total sales of the Company, 100 % (2016: 100 %) related to customers in Pakistan. - All non-current assets of the Company as at September 30, 2017 are located in Pakistan. - The Company sells its product to dealers, governments agencies and autonomous bodies, independent power project

and other corporate customers. However, none of the customers exceeds 10% threshold. 19 CORRESPONDING FIGURES In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting',

corresponding figures in the condensed interim unconsolidated balance sheet comprise of balances as per the audited financial statements of the Company for the year ended December 31, 2016 and the corresponding figures in the condensed interim unconsolidated statement of comprehensive income, condensed interim unconsolidated statement of changes in equity and condensed interim unconsolidated statement of cash flows comprise of balances of comparable period as per the condensed interim unconsolidated financial information of the Company for the nine months ended September 30, 2016.

20 EVENTS AFTER BALANCE SHEET DATE The Board of Directors has declared an interim cash dividend of Rs. 3.50 per share amounting to Rs 422.37 million at this

meeting held on August 30, 2017. These financial statements includes the effect of the aforementioned appropriation.

Subsequent to the balance sheet date, cash dividend is to be distributed to those whose shareholders whose names shall appear on the Member's Register as on the close of business on September 20, 2017.

21 DATE OF AUTHORISATION These condensed interim unconsolidated financial information have been authorized for issue on October 30, 2017 by

the board of directors of the Company. 22 GENERAL All amounts have been rounded to the nearest thousand, rupees.



for the nine months period ended September 30, 2017

ASSETS Non-current assets Property, plant and equipment 6 11,498,759 9,424,264 Long-term investments 7 2,287,501 1,886,977 Long-term deposits 321,465 290,362 Total non-current assets 14,107,725 11,601,603 Current assets Stock-in-trade 19,611,785 16,477,668 Trade debts 11,342,103 7,871,281 Advances 8 288,108 44,605 Deposits, prepayments and other receivables 9 2,017,938 1,297,628 Cash and bank balances 10,210,641 7,832,284 Total current assets 43,470,575 33,523,466 Total assets 57,578,300 45,125,069 EQUITY AND LIABILITIES Authorized share capital 1,500,000 1,500,000

Shareholders' equity Share capital 1,206,792 1,206,792 Reserves 4,272,754 3,746,665 Total shareholders' equity 5,479,546 4,953,457 Non-controlling interest - 469,714 Total shareholders' equity 5,479,546 5,423,171 Surplus on revaluation of fixed assets - net of tax 1,059,201 1,142,880 LIABILITIES Non-current liabilities Long term finances - secured 10 2,567,494 2,307,749 Liabilities against assets subject to finance lease 417,450 471,731 Deferred taxation - net 11 839,799 594,790 Deferred liability - gratuity 162,050 135,791 Total non-current liabilities 3,986,793 3,510,061 Current liabilities Trade and other payables 12 44,357,588 29,836,808 Mark-up accrued 69,538 91,185 Short term borrowings 1,244,147 3,889,629 Current portion of long term finances 10 896,524 599,079 Current maturity of liabilities against assets subject to finance lease 175,911 148,387 Taxation 309,052 483,869 Total current liabilities 47,052,760 35,048,957

Total liabilities 51,039,553 38,559,018

Total equity and liabilities 57,578,300 45,125,069

Contingencies and commitments 13 The annexed notes from 1 to 22 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETAS AT SEPTEMBER 30, 2017

Note


2017

AuditedDecember 31,

2016





CONDENSED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT - UnauditedFOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

Sales - net 152,321,380 92,732,553 57,768,607 33,472,276 Sales tax (28,297,052) (22,578,674) (11,274,918) (6,614,509)Net sales 124,024,328 70,153,879 46,493,689 26,857,767 Other revenue 336,906 107,189 125,016 36,337 Net revenue 124,361,234 70,261,068 46,618,705 26,894,104 Cost of products sold (119,919,075) (66,916,963) (45,226,439) (25,719,569)Gross profit 4,442,159 3,344,105 1,392,266 1,174,535 Operating expenses Distribution and marketing (1,790,338) (1,210,911) (622,488) (438,918)Administrative (466,807) (379,823) (165,725) (121,560) 2,185,014 1,753,371 604,053 614,057

Other income 242,576 151,423 108,901 61,379 Operating profit 2,427,590 1,904,794 712,954 675,436 Finance cost (388,817) (318,851) (126,459) (107,838)Other charges (180,839) (37,237) (158,192) (4,777)Profit before taxation 1,857,934 1,548,706 428,303 562,821 Taxation 14 (762,140) (644,885) (123,116) (271,027)Profit for the period from continued operations 1,095,794 903,821 305,187 291,794 Loss for the period from discontinued operations (27,703) - (8,519) - Profit after tax 1,068,091 903,821 296,668 291,794 Profit / (loss) attributable to: Equity holder of Hascol Petreleum Limited From continued operation 1,095,794 903,821 305,187 291,794 From discontinued operation 1,639 - 13,629 - 1,097,433 903,821 318,816 291,794 Non-controlling interest From continued operation - - - - From discontinued operation (29,342) - (22,148) - (29,342) - (22,148) - 1,068,091 903,821 296,668 291,794 Earning per share - basic & diluted in Rupees From continued operation 9.08 7.49 2.53 2.42 From discontinued operation 0.01 - 0.11 - Total 9.09 7.49 2.64 2.42 The annexed notes from 1 to 22 form an integral part of these condensed interim consolidated financial information.

NoteSeptember 30,

2017September 30,

2017September 30,

2016


September 30,2016






CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - Unaudited FOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

Profit for the period 1,097,433 903,821 318,816 291,794 Other comprehensive income: Items that may be re-classified subsequently to profit and loss account Unrealized gain/ (loss) due to change in fair value of long term investment classified as 'available-for-sale' - net of tax 189,730 (20,057) (231,234) 132,452 Total comprehensive income 1,287,163 883,764 87,582 424,246 The annexed notes from 1 to 22 form an integral part of these condensed interim consolidated financial information.

September 30,2017

September 30,2017

September 30,2016


September 30,2016




CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - UnauditedFOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

Balance as at January 01, 2016 1,206,792 1,070,828 684,721 1,565,856 4,528,197 - 4,528,197 Total comprehensive income for the nine months Profit for the period - - - 903,821 903,821 - 903,821 Other comprehensive income

Unrealized loss due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - (20,057) - (20,057) - (20,057)Total comprehensive income for the nine months - - (20,057) 903,821 883,764 - 883,764 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 97,376 97,376 - 97,376 - - (20,057) 1,001,197 981,140 - 981,140

Transaction with owners Final dividend at Rs. 3.5 per share December 31, 2015 (422,377) (422,377) - (422,377)Interim dividend at Rs. 3.5 per share Jun 30, 2016 - - - (422,377) (422,377) - (422,377)Total transaction with owners - - - (844,754) (844,754) - (844,754)

Balance as at September 30, 2016 1,206,792 1,070,828 664,664 1,722,299 4,664,583 - 4,664,583 Balance as at January 01, 2017 1,206,792 1,070,828 624,930 2,050,907 4,953,457 469,714 5,423,171 Total comprehensive income for the nine months Profit for the period - - - 1,097,433 1,097,433 (29,342) 1,068,091 Other comprehensive income Unrealized gain due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - 189,730 - 189,730 - 189,730 Total comprehensive income for the nine months - - 189,730 1,097,433 1,287,163 (29,342) 1,257,821 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 83,680 83,680 - 83,680 - - 189,730 1,181,113 1,370,843 (29,342) 1,341,501 Transaction with owners Final dividend at Rs. 3.5 per share December 31, 2016 - - - (422,377) (422,377) - (422,377)Interim dividend at Rs. 3.5 per share Jun 30, 2017 - - - (422,377) (422,377) - (422,377)Disposal of non-controlling interest with a change in control of HTL - - - - - (440,372) (440,372)Total transaction with owners - - - (844,754) (844,754) (440,372) (1,285,126) Balance as at September 30, 2017 1,206,792 1,070,828 814,660 2,387,266 5,479,546 - 5,479,546 The annexed notes from 1 to 22 form an integral part of these condensed interim consolidated financial information.


ShareCapital

Share premium

Fairvalue

reserve

Unappropri-ated profit

RevenueCapital

ReserveTotal

shareholders'equity

Non-controlling

interestTotal




Note


CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations 15 9,305,279 3,505,148 Finance cost paid (410,464) (300,964)Dividend paid (422,377) (422,377)Gratuity paid - (790)Taxes paid (668,727) (344,546)Net cash generated from operating activities 7,803,711 2,436,471 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure incurred (3,287,603) (2,029,825)Proceeds from disposal of property, plant and equipment 173,401 - Long term investment made during the period (165,000) - Long term deposits (31,103) (21,511)Net cash used in investing activities (3,145,305) (2,051,336) CASH FLOWS FROM FINANCING ACTIVITIES Lease liability obtained/ (repaid) - net (26,757) (8,898)Long term finance obtained and (repaid) - net 557,190 2,304,440 Long term deposits - 35,279 Net cash generated from financing activities 530,433 2,330,821 Net increase in cash and cash equivalents 5,023,839 2,715,956 Cash and cash equivalents as at the beginning of the period 3,942,655 2,658,948 Cash and cash equivalents as at the end of the period 16 8,966,494 5,374,904 The annexed notes from 1 to 22 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS - UnauditedFOR THE NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017

September 30,2017

September 30,2016

Nine months period ended




1 STATUS AND NATURE OF BUSINESS The Group consists of:

Name of company Status in the Group Percentage of holding Hascol Petroleum Limited Holding company Hascombe Lubricants (Private) Limited Subsidiary company 100% Hascol Petroleum Limited (the Holding Company) was incorporated in Pakistan as a private limited company on March

28, 2001. On September 12, 2007 the Holding Company was converted into a public unlisted company and on May 12, 2014 the Holding Company was listed on the Pakistan Stock Exchange. The registered office of the Holding Company is situated at Suite No. 105-106, The Forum, Khayaban-e-Jami, Clifton, Karachi.

The Holding Company is engaged in the business of procurement, storage and marketing of petroleum and related products, for which the Holding Company obtained oil marketing license from Ministry of Petroleum and Natural Resources in the year 2005.

Subsidiaries Hascombe Lubricants (Private) Limited

Hascombe Lubricants (Private) Limited is a wholly owned subsidiary of the Holding Company which is incorporated in

Pakistan. 2 BASIS OF PREPARATION 2.1 The condensed interim consolidated financial information of the Group for the nine months period ended September 30,

2017 are unaudited and have been prepared in accordance with the requirements of the International Accounting Standard 34 - 'Interim Financial Reporting' and provisions of and directives issued under the Companies Ordinance, 1984 (the Ordinance). In case where requirements differ, the provisions of or directives issued under the Ordinance have been followed.

2.2 This condensed interim Consolidated financial information is being submitted to the shareholders in accordance with

section 245 of the Ordinance and should be read in conjunction with the audited financial statements of the Group for the year ended December 31, 2016.

3 ACCOUNTING POLICIES The accounting policies and the methods of computation adopted in the preparation of this condensed interim

consolidated financial information are the same as those applied in the preparation of audited annual consolidated financial statements of the Group for the year ended December 31, 2016.

4 ACCOUNTING ESTIMATES AND JUDGEMENTS 4.1 The preparation of this condensed interim consolidated financial information in conformity with the approved accounting

standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. However, actual results may differ from these estimates.


NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION





6 PROPERTY, PLANT AND EQUIPMENT Operating fixed assets 6.1 5,846,068 5,878,664 Capital work-in-progress 6.4 5,652,691 3,545,600 11,498,759 9,424,264 6.1 Opening book value 5,878,654 4,220,584 Additions during the period / year 6.2 1,171,893 2,110,862 Disposal 6.3 (814,991) (53,650) Depreciation (389,488) (399,142) Closing book value 5,846,068 5,878,654 6.2 Additions to operating assets during the period/ year were as follows:

Owned assets Land - 695,685 Depot building 281,598 80,341 Pump building 96,939 340,335 Tanks and pipelines 151,622 185,597 Dispensing pumps 53,182 22,117 Plant and machinery 20,140 28,910 Electrical, mechanical and fire fighting equipment's 117,664 167,866 Furniture, office equipment and other assets 6,435 69,623 Vehicles 180,968 66,877 Computer auxiliaries 9,777 18,408 918,325 1,675,759 Leased assets Building on leasahold land - 7,526 Dispensing pumps - 35,040 Plant and machinery - 37,320 Electrical, mechanical and fire fighting equipments 20,086 5,185 Vehicles 233,482 350,032 253,568 435,103 1,171,893 2,110,862

Note


2017

AuditedDecember 31,

2016

4.2 However, management believe that the change outcome of these judgement, accounting estimates and assumptions would not have any material affect on the amounts disclosed in condensed interim consolidated financial information of the entity.

5 FINANCIAL RISK MANAGEMENT The financial risk management objectives and policies are consistent with those disclosed in the annual audited

consolidated financial statements of the Group as at and for the year ended December 31, 2016.


6.3 The following assets were disposed off during the period/ year: September 30, 2017 (unaudited) (818,993) 4,002 (814,991) December 31, 2016 (audited) (refer note 5.1) (60,196) 6,546 (53,650)

CostAccumuladedDepreciation

Net BookValue

6.4 Capital work-in-progress Land and Office building 590,337 350,283 Depot building 1,567,153 1,258,004 Pump building 386,417 250,137 Plant and machinery 129,473 22,319 Tanks and pipelines 1,536,293 649,540 Dispensing pumps 150,807 96,357 Computer auxilliaries 13,325 7,045 Electrical, mechanical and fire fighting equipment's 606,340 365,453 Furniture, office equipments and other assets 164,610 110,014 Vehicles 124,988 109,971 Borrowing cost capitalized 132,607 123,214 Advances to contractors 250,341 203,263 5,652,691 3,545,600

7 LONG-TERM INVESTMENTS Available for sale Investment at fair value Pakistan Refinery Limited - quoted 7.1 2,053,486 1,886,977 Investment at cost Hascol Terminal Limited - unquoted 7.2 234,015 - 2,287,501 1,886,977




Note


2017

AuditedDecember 31,

2016

7.1.1 Investment in Pakistan Refinery Limited (quoted) amounts to Rs. 1,172.77 million (December 31, 2016 : Rs. 1,172.77 million) representing 13.72% (December 31, 2016: 13.72%) shares in PRL as at September 30, 2017. The Group has 43.24 million shares (December 31, 2016 : 43.24 million shares) as at September 30, 2017.


7.1 Investment at fair value

Pakistan Refinery Limited September 30, 2017 7.2.1 1,172,772 880,714 2,053,486 December 31, 2016 1,172,772 714,205 1,886,977

Cost Unrealizedgain

CarryingValue




7.2 Hascol Terminals Limited - at cost

Cost 75,000 - Net changes due to loss of control (5,985) - 69,015 - Addition during the period 165,000 - 7.2.1 234,015 - 7.2.1 Investment in Hascol Terminals Limited (unquoted) amounts to Rs. 240 million (December 31, 2016: Rs. 75 million)

representing 15% (December 31, 2016: 62.5%) shares in HTL as at September 30, 2017. The Group has 24 million shares (December 31, 2016: 7.5 million shares) as at September 30, 2017. During the period Group subscribed to 16.5 million right shares at Rs. 10 each. These shares are not quoted on an active market and have been carried at cost. The Group provides storage facilities for imported and locally produced petroleum and related products.

8 This includes advance against future issue of shares by Hascol Lubricants (Private) Limited, the subsidiary of the Group,

VAS LNG (Private) Limited, an associate entity of the Group and Hascol Terminals Limited, amounting to Rs. 2.01 million, Rs. 4.02 million and Rs. 236.91 million respectively.


2017Note

AuditedDecember 31,

2016

9 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Current portion of lease deposits 32,165 5,740 Prepaid rent 62,470 69,462 Prepaid insurance and others 32,100 14,001 Receivable from oil marketing companies 9.1 44,658 11,328 Receivable against regulatory duty 25,533 25,533 Inland Freight Equalization Margin (IFEM) receivable 1,697,496 1,024,234 Franchise income receivable 69,352 73,304 Price differential claims 9.2 5,083 5,083 Others 9.3 49,081 68,943 2,017,938 1,297,628 9.1 This represents amount receivable from various Oil Marketing Companies (OMCs) on account of share of motor

gasoline imported by the Group on behalf of various OMCs. 9.2 This represents amount receivable from the Government of Pakistan (GoP) net of recovery as per fortnightly rates

declared by the Ministry of Petroleum and Natural Resources (MPNR). The Group together with other oil marketing companies is actively perusing the matter with the concerned authorities for the early settlement of above claim. The Group considers that the balance amount will be reimbursed by GoP in due course of time.

9.3 This includes Rs. Nil (December 31, 2016: Rs. 4.45 million) receivable from Sigma Motors (Private) Limited.

UnauditedSeptember30,

2017Note

AuditedDecember 31,

2016





10 LONG TERM FINANCES - Secured

Term finance facility 1,695,043 945,007 Sukuk certificate 10.1 1,768,975 1,961,821 3,464,018 2,906,828 Less: Current portion of long term finances Term finance facility 496,524 299,079 Sukuk certificate 400,000 300,000 896,524 599,079 2,567,494 2,307,749 10.1 Sukuk certificate 10.2 1,800,000 2,000,000 Issuance cost Opening (38,179) - Addition - (47,731) Charged to profit and loss account 7,154 9,552 (31,025) (38,179) 1,768,975 1,961,821

10.2 This represent privately placed long term islamic certificate (Sukuk) amounting to Rs. 2,000 million, issued by the Group to meet the working capital requirement and expansion plans of the Group. Summit Bank Limited is the trustee while Meezan Bank Limited is acting as shariah structuring advisor for this Sukuk. The Group is in the process of listing of Sukuk over the counter (OTC) on Pakistan Stock Exchange. This facility carries profit at 3 month KIBOR plus 1.5% per annum, payable quarterly. This arrangement is secured against first pari-passu charge over specific depots and retail outlets of the Group inclusive of a 25% margin. The certificates will be redeemed in 20 equal quarterly installments, in arrears, started from April 2017.

11 DEFERRED TAXATION - net

This comprises the following: Taxable temporary difference arising in respect of : Accelerated depreciation (467,003) (354,233) Assets under finance lease (159,736) (129,683) Revaluation of fixed assets (453,943) (513,467) Exchange gain - (1,797) Surplus on remeasurement on investment (66,054) (89,276) Deductible temporary difference arising in respect of : Liabilities against assets subject to finance lease 176,497 182,677 Provision for : - retirement benefit 48,202 40,718 - doubtful debts 2,348 2,358 - franchise income 8,135 8,168 Investments in subsidiary 9,103 9,140 Turnover tax 62,652 250,605 (839,799) (594,790)

Note


2017

AuditedDecember 31,

2016


2017

AuditedDecember 31,

2016


12 TRADE AND OTHER PAYABLES

Trade creditors 35,042,982 22,260,329 Payable to cartage contractors 3,570,894 2,445,673 Advance from customers 4,402,715 4,253,932 Dealers' and customers' security deposits 223,050 170,000 Accrued liabilities 15,211 16,144 Other liabilities 680,359 690,730 Dividend payabale 422,377 - 44,357,588 29,836,808

13 CONTINGENCIES AND COMMITMENTS 13.1 Contingencies 13.1.1 As per the deliberations of the Main Committee of the Oil Companies Advisory Committee (OCAC) held in their

meeting number MCM-168 dated September 20, 2007, the financial costs on outstanding Price Differential Claims (PDC) should be worked and billed to the Government of Pakistan (GOP) through OCAC by the Oil Marketing Companies (OMCs) on a regular basis. Although the Group had billed Rs. 65.97 million (December 31, 2016: Rs. 65.97 million) to the GOP/ OCAC, the management had not accounted for its impact in these financial statements as the inflow of economic benefits, though probable, is not virtually certain.

13.1.2 The Group has filed appeal before the Commissioner Appeals against the Order-in-Original No 06/2017 dated June 07, 2017 for the tax periods from January 2015 to December 2015 passed by Deputy Commissioner Inland Revenue raising tax demand of Rs. 125 million mainly relating to the matter of zero rating of supply of oil to international ships. The Group is confident that the matter will be decided in its favor.

13.2 Commitments The facility for opening letters of credit (LCs) acceptances as at September 30, 2017 amounted to Rs. 42,425 million

(December 31, 2016: Rs. 30,550 million) of which the amount remaining unutilized as at that date was Rs. 4,580 million (December 31, 2016: Rs. 3,631 million)

Commitments in respect of capital expenditure contracted for but not yet incurred are as follows:

Property, plant and equipment 727,148 758,237





2017

AuditedDecember 31,

2016


2017

AuditedDecember 31,

2016



2017

AuditedDecember 31,

2016




Commitments for rental of assets under operating lease agreements / ijarah contracts as at September 30, 2017 amounted to Rs. 1,865 million (December 31, 2016: Rs. 1,984 million) as follows:

Not later than one year 178,634 173,461 Later than one year and not later than five years 632,478 642,427 Later than five years 1,054,067 1,167,834 1,865,179 1,983,722

14 TAXATION Current 429,291 435,362 Prior period 64,619 28,610 Deferred 268,230 180,913 762,140 644,885 15 CASH GENERATED FROM OPERATIONS Profit before taxation 15.1 1,830,231 1,548,706 Adjustment for: Depreciation and amortization 389,488 288,747 Provision for gratuity 26,259 20,631 Gain on sale of fixed assets (22,528) - Gain on disposal of subsidary (1,639) - Finance cost 388,817 318,851 Changes in working capital 15.2 6,694,651 1,328,213 9,305,279 3,505,148 15.1 Profit before taxation

Profit before tax from continued operation 1,857,934 1,548,706 Profit before tax from discontinued operation (27,703) - 1,830,231 1,548,706 15.2 Changes in working capital

(Increase) / decrease in current assets Stock-in-trade (3,134,117) (716,151) Trade debts (3,470,822) (1,736,758) Loans and advances - considered good (78,503) (6,881) Sales tax receivable - (216,337) Deposits, prepayments and other receivables (720,310) (604,481) (7,403,752) (3,280,608) Increase/ (decrease) in current liabilities Trade and other payables 14,098,403 4,608,821 6,694,651 1,328,213

Note


2017


2016


Nature of relationship Nature of transaction Associated companies Sigma Motors (Private) Limited Office rent income 2,818 5,073 Staff retirement benefits/ contribution funds Provident fund Contribution 17,109 11,327 Gratuity fund Contribution 26,259 20,631 Key management personnel Key management personnel Salaries and benefits 66,588 54,419 Director's Fee Fee for attending meeting 5,650 3,075 Other related parties Other related parties Consultancy services 11,400 14,508

Balances

Associated Companies Sigma Motors (Private) Limited Other receivable - 4,458

All transactions with related parties have been carried out on arm's length basis.

Expenses recovered from / charged by related parties are based on actual.


2017

AuditedDecember 31,

2016

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group directly or indirectly. The Group considers its Executive Director and Executives to be key management personnel.

18 OPERATING SEGMENTS

- These financial statements have been prepared on the basis of a single reportable segment. - Sales from petroleum products represents 99.7 % (2016: 99.7%) of total revenues of the Group. - Out of total sales of the Group, 100 % (2016: 100 %) related to customers in Pakistan. - All non-current assets of the Group as at September 30, 2017 are located in Pakistan. - The Group sells its product to dealers, governments agencies and autonomous bodies, independent power project and

other corporate customers. However, none of the customers exceeds 10% threshold.



17 RELATED PARTY TRANSACTIONS AND BALANCES

Transactions entered into and balances outstanding with the related parties are as follows:



16 CASH AND CASH EQUIVALENTS

Cash and bank balances 10,210,641 6,254,904 Finances utilized under markup arrangements - secured (1,244,147) (880,000) 8,966,494 5,374,904


2017


2016

19 CORRESPONDING FIGURES In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting',

corresponding figures in the condensed interim Consolidated balance sheet comprise of balances as per the audited financial statements of the Group for the year ended December 31, 2016 and the corresponding figures in the condensed interim Consolidated statement of comprehensive income, condensed interim Consolidated statement of changes in equity and condensed interim Consolidated statement of cash flows comprise of balances of comparable period as per the condensed interim Consolidated financial information of the Group for the nine months ended September 30, 2016.

20 EVENTS AFTER BALANCE SHEET DATE The Board of Directors has declared an interim cash dividend of Rs. 3.50 per share amounting to Rs. 422.37 million at this

meeting held on August 30, 2017. These financial statements includes the effect of the aforementioned appropriation.

Subsequent to the balance sheet date, cash dividend is to be distributed to those whose shareholders whose names shall appear on the Member's Register as on the close of business on September 20, 2017.

21 DATE OF AUTHORISATION These condensed interim consolidated financial information have been authorized for issue on October 30, 2017 by the

board of directors of the Group.

22 GENERAL All amounts have been rounded to the nearest thousand, rupees.







Documents

Lay out A - 1 - · PDF fileJCR-VIS Credit Company Limited. Hascol has a strategic License agreement with FUCHS Middle East (FOMEL), an associate of FUCHS Petrolub based in