hpl marach 31 - 2017 final

04 Corporate Information

06 Directors’ Report

08 Condensed Interim Unconsolidated Financial Statements

24 Condensed Interim Consolidated Financial Statements

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 400 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 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 December 2017. 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 year to accommodate the ever growing demand for energy.

1st Quarter 2017 Page 04QUALITY PERSONIFIED

Chairman & C.E.OMr. Mumtaz Hasan Khan

DirectorsMr. Abdul Aziz Khalid (Nominee of Vitol Dubai Limited)Mr. Farooq Rahmatullah Khan Mr. Liaquat AliMr. Najmus Saquib HameedMr. Saleem ButtMr. Sohail Hasan

Company Secretary Mr. Zeeshan Ul Haq

Audit CommitteeMr. Sohail Hasan (Chairman)Mr. Liaquat Ali (Member)Mr. Najmus Saquib Hameed (Member)

Strategy CommitteeMr. Farooq Rahmatullah Khan (Chairman)Mr. Mumtaz Hasan Khan (Member)Mr. Liaquat Ali (Member)Mr. Saleem Butt (Member)

Human Resource CommitteeMr. Najmus Saquib Hameed (Chairman)Mr. Mumtaz Hasan Khan (Member)Mr. Liaquat Ali (Member)

AuditorsGrant Thornton Anjum Rahman Chartered Accountants

1st Quarter 2017 Page 05

BankersAllied Bank LimitedAl Baraka Bank (Pakistan) LimitedAskari Bank LimitedBank Al Falah Limited Bank Al Habib LimitedBank Islami Pakistan LimitedFaysal Bank LimitedFirst Women Bank LimitedHabib Metropolitan Bank LimitedHabib Bank LimitedIndustrial and Commercial Bank of China Limited MCB 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


I am pleased to report that the company is successfully executing the growth strategy which, the Board and senior management has laid out. During the first quarter our sales volume grow by 29% over the same period last year and we ended the first quarter as the second largest oil marketing company in Pakistan, in terms of volume. Moreover, our profit after tax has also increased from 202.20million to 376.7million.This is a great achievement for which I want to thank the senior management and all the employees for executing the business plan successfully.

In the first quarter, we were able to commission our Mehmoodkot installation and this has given us a huge marketing advantage in Southern Punjab. Our storage facility at Sahiwal will INSHALLAH be completed in the second quarter. Simultaneously, work is proceeding at a fast pace at Thalian and Kotlajam. With the completion of these facilities our sales volume will get a big boost.

As, I mentioned in the annual report, the work is also proceeding at great speed at Port Qasim storage facility and the Lube Oil Blending Plant. Additionally, we have acquired land adjacent to the Byco Refinery to build a storage facility next to the refinery. This will enable us to improve our operational efficiency in meeting the requirements of our customers.

I take this opportunity to thank the members of the Board for their support and guidance. The company is now poised for sustainable growth and profitability in the future.

Mumtaz Hasan KhanChairman & Chief Executive

for the three months period ended March 31, 2017


ASSETS Non-current assets Property, plant and equipment 6 9,470,325 8,688,947 Long-term investments 7 3,521,985 1,961,977 Long-term deposits 310,887 288,882 Total non-current assets 13,303,197 10,939,806 Current assets Stock-in-trade 15,576,221 16,477,668 Trade debts 9,972,132 7,871,281 Advances 457,278 253,413 Deposits, prepayments and other receivables 8 1,898,335 1,286,748 Cash and bank balances 5,846,805 7,821,070 Total current assets 33,750,771 33,710,180

TOTAL ASSETS 47,053,968 44,649,986 EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY Share capital 1,206,792 1,206,792 Reserves 5,107,639 3,755,346 Total shareholders' equity 6,314,431 4,962,138 Surplus on revaluation of fixed assets - net of tax 1,109,945 1,142,880 LIABILITIES

Non-current liabilities Long term finances - secured 9 2,153,880 2,307,749 Liabilities against assets subject to finance lease 166,522 471,731 Deferred taxation - net 10 869,847 594,790 Deferred liability - gratuity 144,544 135,791 Total non-current liabilities 3,334,793 3,510,061 Current liabilities Trade and other payables 11 32,423,762 29,822,758 Mark-up accrued 72,603 91,185 Short term borrowings 1,947,303 3,889,629 Current portion of long term finances 9 711,662 599,079 Current maturity of liabilities against assets subject to finance lease 505,937 148,387 Taxation 633,532 483,869 Total current liabilities 36,294,799 35,034,907 TOTAL LIABILITIES 39,629,592 38,544,968

TOTAL EQUITY AND LIABILITIES 47,053,968 44,649,986

Contingencies and commitments 12 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016

(Rupees in thousand)

CONDENSED INTERIM UNCONSOLIDATED BALANCE SHEETAS AT MARCH 31, 2017


Sales - net 42,802,186 28,492,841 Sales tax (7,993,851) (8,172,116)Net sales 34,808,335 20,320,725 Other revenue 86,116 31,568 Net revenue 34,894,451 20,352,293 Cost of products sold (33,466,425) (19,590,067)Gross profit 1,428,026 762,226 Operating expenses Distribution and marketing (540,153) (357,963)Administrative (148,602) (121,154) (688,755) (479,117) Other income 66,933 53,154 Operating profit 806,204 336,263 Finance cost (113,869) (102,835)Other (charges)/ income (23,091) 2,388 Profit before taxation 669,244 235,816 Taxation 13 (292,518) (33,607) Profit for the period 376,726 202,209 Earning per share - basic & diluted Rupees 3.12 1.68 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

NoteMarch 31,

2017March 31,

2016


CONDENSED INTERIM UNCONSOLIDATED PROFIT AND LOSS ACCOUNT - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017


Profit for the three months period 376,726 202,209 Other comprehensive income: Items that may be reclassifed 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 deferred tax 1,365,008 (84,390) Total comprehensive income for the period 1,741,734 117,819

The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

March 31,2017

March 31,2016


CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017


CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from / (used) in operations 14 1,207,710 (911,501)Finance cost paid (132,451) (87,690)Gratuity paid - (349)Taxes paid (191,797) (22,440)Net cash generated from/ (used) in operating activities 883,462 (1,021,980) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure incurred (928,664) (358,892)Proceeds from disposal of property, plant and equipment 24,213 - Long term deposits (22,005) 14,181 Net cash used in investing activities (926,456) (344,711) CASH FLOWS FROM FINANCING ACTIVITIES Lease liability obtained/ (repaid) - net 52,341 (20,868)Long term finance (repaid)/ obtained - net (41,286) 1,939,590 Net cash generated from financing activities 11,055 1,918,722 Net increase in cash and cash equivalents (31,939) 552,031 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 3,899,502 3,210,523

The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.

NoteMarch 31,

2017March 31,

2016


CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF CASH FLOWS - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017


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 three months Profit for the three months period - - - 202,209 202,209 Other comprehensive income Unrealized loss due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - (84,390) - (84,390)Total comprehensive income - - (84,390) 202,209 117,819 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 32,459 32,459 - - (84,390) 234,668 150,278 Transaction with owners Final dividend at Rs. 3.5 per share Dec 2015 - - - (422,377) (422,377)Total transaction with owners - - - (422,377) (422,377) Balance as at March 31, 2016 1,206,792 1,070,828 600,331 1,379,053 4,257,004 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 three months Profit for the three months period - - - 376,726 376,726 Other comprehensive income Unrealized loss due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - 1,365,008 - 1,365,008 Total comprehensive income - - 1,365,008 376,726 1,741,734 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 32,936 32,936 - - 1,365,008 409,662 1,774,670

Transaction with owners Final dividend at Rs. 3.5 per share Dec 2016 - - - (422,377) (422,377)Total transaction with owners - - - (422,377) (422,377) Balance as at March 31, 2017 1,206,792 1,070,828 1,989,938 2,046,873 6,314,431 The annexed notes 1 to 19 form an integral part of these condensed interim unconsolidated financial information.


CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017

ShareCapital

Share premium

Fairvalue

reserve

Unappropri-ated profit

RevenuereserveCapital reserve Total

shareholders'equity


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 The condensed interim unconsolidated financial information of the Company for the three month period ended March 31, 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.

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 During the preparation of this condensed interim unconsolidated financial information, the significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainly were the same as those that were applied to the audited annual financial statements for the year ended December 31, 2016.

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

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

FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017

NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION


6 PROPERTY, PLANT AND EQUIPMENT Operating fixed assets 5,330,666 5,214,536 Capital work-in-progress 6.3 4,139,659 3,474,411 9,470,325 8,688,947

6.1 Additions to operating assets during the period/ year were as follows: Owned assets Land - 31,557 Depot Building - 80,341 Pump Building 98,939 340,335 Tanks And Pipelines 25,000 185,597 Dispensing Pumps 50,295 22,117 Plant & Machinery - 28,920 Electrical, mechanical and fire fighting equipments 1,085 167,866 Furniture, office equipment and other assets 216 69,623 Vehicles - 66,877 Computer auxiliaries 788 18,408 Leased assets Building on leasehold land - 7,526 Dispensing Pumps - 35,040 Plant & Machinery - 37,320 Electrical, mechanical and fire fighting equipments - 5,185 Vehicles 87,095 350,032 263,417 1,446,744

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

March 31, 2017 (unaudited) 26,051 2,567 23,484

December 31, 2016 (audited) - note 5.4 60,196 6,546 53,650

6.2.1 For details of the assets disposed/ written off during the year ended December 31, 2016, please refer to the annual audited financial statements for the same year.

Cost AccumuladedDepreciation

Net BookValue

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016








March 31, 2017 - Unaudited 7.2.1 1,172,772 2,274,213 3,446,985 December 31, 2016 - Audited 1,172,772 714,205 1,886,977

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.

7.1.2 The Company subscribed 7.5 million shares of Hascol Terminal Limited (HTL) at a subscription price of Rs.10 each, which represent 62.5% of the share capital of HTL. These shares are not quoted on an active market and have been carried at cost.

7.2 Pakistan refinery Limited - "available-for-sale"

Hascombe Lubricant (Private) Limited 7.1.1 30,604 (30,604) - - Hascol Terminals Limited 7.1.2 75,000 - 75,000 75,000 105,604 (30,604) 75,000 75,000

Note Cost

Provisionfor

impairment

UnauditedMarch 31,

2017

Carrying ValueAudited

December 31,2016

Note Cost Unrealizedgain

CarryingValue

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016 6.3 Capital work-in-progress Depot building 1,903,072 1,601,993 Pump building 210,115 250,137 Plant and machinery 77,900 22,319 Tanks and pipelines 678,210 649,540 Dispensing pumps 47,872 96,357 Computer auxilliaries 10,242 7,045 Electrical, mechanical and fire fighting equipments 430,941 365,453 Furniture, office equipments and other assets 121,014 107,768 Vehicles 127,685 109,971 Borrowing cost capitalized 160,084 123,214 Advances to suppliers 372,524 140,614 4,139,659 3,474,411

7 LONG-TERM INVESTMENTS Subsidiary - at cost 7.1 75,000 75,000 Pakistan Refinery Limited - available-for-sale 7.2 3,446,985 1,886,977 3,521,985 1,961,977

7.1 Subsidiary - at cost


8.1 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.

8.2 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.

8.3 This includes Rs. 6.15 million (December 31, 2016: Rs. 4.45 million) receivable from Sigma Motors (Private) Limited (a

related party). 9 LONG TERM FINANCES - SECURED

Term finance facility 901,340 945,007 Sukuk certificate 9.1 1,964,202 1,961,821 2,865,542 2,906,828 Current portion of long term finances Term finance facility 311,662 299,079 Sukuk certificate 400,000 300,000 (711,662) (599,079) 2,153,880 2,307,749 9.1 Sukuk certificate 9.2 2,000,000 2,000,000

Issuance cost Opening (38,179) - Addition - (47,731) Charged to profit and loss 2,381 9,552 (35,798) (38,179) 1,964,202 1,961,821

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 March 31, 2017. The Company has 43.24 million shares (December 31, 2016: 43.24 million shares) as at March 31, 2017.

8 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Current portion of lease deposits 4,952 5,740 Prepaid rent 94,965 66,616 Prepaid insurance and others 54,586 14,001 Receivable from oil marketing companies 8.1 123,037 11,328 Receivable against regulatory duty 25,533 25,533 Inland Freight Equalization Margin (IFEM) receivable 1,450,021 1,024,234 Franchise income receivable 72,704 73,304 Price Differential Claims 8.2 5,083 5,083 Others 8.3 67,454 60,909 1,898,335 1,286,748

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016





9.2 This represent privately placed long term islamic certificate (Sukuk) amounting to Rs. 2,000 million, issued by the Company during the year 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, starting from April 2017.

12 CONTINGENCIES AND COMMITMENTS 12.1 Contingencies 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.

10 DEFERRED TAXATION - net This comprises the following: Taxable temporary difference arising in respect of : Accelerated depreciation (399,963) (354,233) Assets under finance lease (145,949) (129,683) Revaluation of fixed assets (498,669) (513,467) Exchange gain - (1,797) Surplus on remeasurement of investment (284,277) (89,276) Deductible temporary difference arising in respect of : Liabilities against assets subject to finance lease 206,461 182,677 Provision for : - retirement benefit 44,379 40,718 - doubtful debts 2,424 2,358 - franchise income 8,397 8,168 Investments in subsidiary 9,396 9,140 Turnover tax 187,954 250,605 (869,847) (594,790) 11 TRADE AND OTHER PAYABLES Trade creditors 23,850,374 22,258,817 Payable to cartage contractors 3,026,046 2,445,673 Advance from customers 4,074,626 4,253,932 Dealers' and customers' security deposits 178,500 170,000 Accrued liabilities 11,759 6,153 Other liabilities 860,080 688,183 Dividend payable 422,377 - 32,423,762 29,822,758

UnauditedMarch 31,

2017

AuditedDecember 31,

2016





12.2 Commitments The facility for opening letters of credit (LCs) acceptances as at March 31, 2017 amounted to Rs. 33,550 million

(December 31, 2016: Rs. 30,550 million) of which the amount remaining unutilized as at that date was Rs. 7,384 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 749,186 758,237 Commitments for rental of assets under operating lease agreements / ijarah contracts as at March 31, 2017 amounted

to Rs. 1,979 million (December 31, 201 : Rs. 1,984 million) as follows:

Not later than one year 178,907 173,461 Later than one year and not later than five years 651,188 642,427 Later than five years 1,149,389 1,167,834 1,979,485 1,983,722

13 TAXATION Current 212,463 83,564 Deferred 80,056 (49,957) 292,518 33,607 14 CASH GENERATED FROM OPERATIONS Profit before taxation 669,244 235,816 Adjustment for: Depreciation and amortization 123,802 89,409 Provision for gratuity 8,753 6,877 Gain on sale of fixed assets (728) - Finance cost 113,869 102,835 Working capital changes 14.1 292,771 (1,346,438) 1,207,710 (911,501)

14.1 Changes in working capital

(Increase) / decrease in current assets Stock-in-trade 901,447 2,295,835 Trade debts (2,100,851) 711,506 Deposits, prepayments and other receivables (611,587) (927) Loans and advances - considered good (203,865) (312,488) (2,014,856) 2,693,926 Increase/ (decrease) in current liabilities Trade and other payables 2,307,627 (4,040,364) 292,771 (1,346,438)

NoteMarch 31,

2017March 31,

2016




UnauditedMarch 31,

2017

AuditedDecember 31,

2016

UnauditedMarch 31,

2017

AuditedDecember 31,

2016


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.

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.

16 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 three months ended March 31, 2016.

17 EVENTS AFTER BALANCE SHEET DATE Shareholders in their annual general meeting held on April 28, 2017 have approved final cash dividend of Rs. 3.5 per share

amounting to Rs. 422.38 million. This condensed interim unconsolidated financial information includes the effect of the aforementioned appropriation.

Subsequent to the balance sheet date, cash dividend is to be distributed to those shareholders whose name were

appearing on the Members’ Register as on the close of business on April 21, 2017.

15 RELATED PARTY TRANSACTIONS AND BALANCES

Nature of relationship Nature of transaction Associated companies Sigma Motors (Private) Limited Office rent 1,691 1,691 Staff retirement benefits / contribution funds Provident fund Contribution 4,339 3,080 Gratuity fund Contribution 8,753 6,876 Key management personnel Salaries and benefits 22,196 18,163 Director Fee Fee for attending meeting 2,050 1,100 Other related parties Consultancy services 4,275 3,180

Balances Associated companies Sigma Motors (Private) Limited Other receivable 6,149 4,458

March 31,2017

March 31,2016




UnauditedMarch 31,

2017

AuditedDecember 31,

2016


18 DATE OF AUTHORISATION These condensed interim unconsolidated financial information have been authorised for issue on April 28, 2017 by the

board of directors of the Company. 19 GENERAL All amounts have been rounded to the nearest thousand.



for the three months period ended March 31, 2017


ASSETS Non-current assets Property, plant and equipment 6 10,560,363 9,424,264 Long-term investments 7 3,446,985 1,886,977 Long-term deposits 313,181 290,362 Total non-current assets 14,320,529 11,601,603 Current assets Stock-in-trade 15,576,221 16,477,668 Trade debts 9,972,132 7,871,281 Advances 55,370 44,605 Deposits, prepayments and other receivables 8 1,910,392 1,297,628 Cash and bank balances 6,027,330 7,832,284 Total current assets 33,541,445 33,523,466

TOTAL ASSETS 47,861,974 45,125,069 EQUITY AND LIABILITIES

SHAREHOLDERS' EQUITY Share capital 1,206,792 1,206,792 Reserves 5,096,211 3,746,665 Equity attributable to owners of the holding company 6,303,003 4,953,457 Non-controlling interest 812,919 469,714 7,115,922 5,423,171 Surplus on revaluation of fixed assets - net of tax 1,109,945 1,142,880 LIABILITIES

Non-current liabilities Long term finances - secured 9 2,153,880 2,307,749 Liabilities against assets subject to finance lease 166,522 471,731 Deferred taxation - net 10 869,847 594,790 Deferred liability - gratuity 144,544 135,791 Total non-current liabilities 3,334,793 3,510,061 Current liabilities Trade and other payables 11 32,430,277 29,836,808 Mark-up accrued 72,603 91,185 Short term borrowings 1,947,303 3,889,629 Current portion of long term finances 9 711,662 599,079 Current maturity of liabilities against assets subject to finance lease 505,937 148,387 Taxation 633,532 483,869 Total current liabilities 36,301,314 35,048,957

TOTAL LIABILITIES 39,636,107 38,559,018

TOTAL EQUITY AND LIABILITIES 47,861,974 45,125,069 Contingencies and commitments 12 The annexed notes 1 to 19 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETAS AT MARCH 31, 2017

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016



Sales - net 42,802,186 28,492,841 Sales tax (7,993,851) (8,172,116)Net sales 34,808,335 20,320,725 Other revenue 86,116 31,568 Net revenue 34,894,451 20,352,293 Cost of products sold (33,466,425) (19,590,067)Gross profit 1,428,026 762,226 Operating expenses Distribution and marketing (540,153) (357,963)Administrative (152,998) (121,154) (693,151) (479,117) Other income 66,933 53,154 Operating profit 801,808 336,263 Finance cost (113,869) (102,835)Other (charges)/ income (23,091) 2,388 Profit before taxation 664,848 235,816 Taxation 13 (292,518) (33,607) Profit for the period 372,330 202,209 Profit / (Loss) attributable to: Equity holders of the holding company 373,979 202,209 Non-controlling interest (1,649) - 372,330 202,209 Earning per share - basic & diluted Rupees 3.09 1.68

The annexed notes 1 to 19 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017

NoteMarch 31,

2017March 31,

2016


March 31,2017

March 31,2016



Profit for the three months period 372,330 202,209 Other comprehensive income: Items that may be reclassifed 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 deferred tax 1,365,008 (84,390) Total comprehensive income for the period 1,737,338 117,819 Total comprehensive income / (loss) attributable to: Equity holders of the holding company 1,738,987 117,819 Non-controlling interest (1,649) - 1,737,338 117,819

The annexed notes 1 to 19 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - Unaudited FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017

NoteMarch 31,

2017March 31,

2016



CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from / (used) in operations 14 1,387,702 (911,501)Finance cost paid (132,451) (87,690)Gratuity paid - (349)Taxes paid (191,796) (22,440)Net cash generated from/ (used) in operating activities 1,063,455 (1,021,980) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditure incurred (1,283,386) (358,892)Proceeds from disposal of property, plant and equipment 24,213 - Long term deposits (22,819) 14,181 Net cash used in investing activities (1,281,992) (344,711) CASH FLOWS FROM FINANCING ACTIVITIES Lease liability obtained/ (repaid) - net 52,341 (20,868)Contribution of NCI in subsidary company 344,854 - Long term finance (repaid)/ obtained - net (41,286) 1,939,590 Net cash generated from financing activities 355,909 1,918,722 Net increase in cash and cash equivalents 137,372 552,031 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 4,080,027 3,210,979 The annexed notes 1 to 19 form an integral part of these condensed interim consolidated financial information.

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 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 three months Profit for the three months period - - - 202,209 202,209 - 202,209 Other comprehensive income Unrealized loss due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - (84,390) - (84,390) - (84,390)Total comprehensive income - - (84,390) 202,209 117,819 - 117,819 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 32,459 32,459 - 32,459 - - (84,390) 234,668 150,278 - 150,278 Transaction with owners Final dividend at Rs. 3.5 per share Dec 2015 - - - (422,377) (422,377) - (422,377)Total transaction with owners - - - (422,377) (422,377) - (422,377) Balance as at March 31, 2016 1,206,792 1,070,828 600,331 1,378,147 4,256,098 - 4,256,098 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 three months Profit for the three months period - - - 373,979 373,979 (1,649) 372,330 Other comprehensive income Unrealized loss due to change in fair value of long term investment classified as 'available-for-sale' - net of tax - - 1,365,008 - 1,365,008 - 1,365,008 Total comprehensive income - - 1,365,008 373,979 1,738,987 (1,649) 1,737,338 Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - net of tax - - - 32,936 32,936 - 32,936 - - 1,365,008 406,915 1,771,923 (1,649) 1,770,274 Transaction with owners Final dividend at Rs. 3.5 per share Dec 2016 - - - (422,377) (422,377) - (422,377)Consideration for acquisition of subsidary - - - - - 344,854 344,854 Total transaction with owners - - - (422,377) (422,377) 344,854 (77,523) Balance as at March 31, 2017 1,206,792 1,070,828 1,989,938 2,035,445 6,303,003 812,919 7,115,922 The annexed notes 1 to 19 form an integral part of these condensed interim consolidated financial information.


CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - UnauditedFOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2017

ShareCapital

Share premium

Fairvalue

reserve

Unappropri-ated profit

RevenuereserveCapital reserve Total

shareholders'equity

Non-controlling

interestTotal


1 STATUS AND NATURE OF BUSINESS

The Group consists of:

Name of company Status in the Percentage of Group holding

Hascol Petroleum Limited Holding company -

Hascombe Lubricants (Private) Limited Subsidiary company 100% Hascol Terminals Limited Subsidiary company 62.50%

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.

Hascol Terminals Limited

Hascol Terminals Limited is a subsidiary of the Holding Company which is incorporated in Pakistan. The subsidary provides storage facilities for imported and locally produced petroleum and related products.

2 BASIS OF PREPARATION

The condensed interim consolidated financial information of the Group for the three month period ended March 31, 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.

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 financial statements of the Group for the year ended December 31, 2016.


NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION


6 FPROPERTY, PLANT AND EQUIPMENT Operating fixed assets 5,994,794 5,878,664 Capital work-in-progress 6.3 4,565,569 3,545,600 10,560,363 9,424,264

6.1 Additions to operating assets during the period/ year were as follows: Owned assets Land - 695,685 Depot Building - 80,341 Pump Building 98,939 340,335 Tanks And Pipelines 25,000 185,597 Dispensing Pumps 50,295 22,117 Plant & Machinery - 28,920 Electrical, mechanical and fire fighting equipments 1,085 167,866 Furniture, office equipment and other assets 216 69,623 Vehicles - 66,877 Computer auxiliaries 788 18,408 Leased assets Building on lease hold land - 7,526 Dispensing Pumps - 35,040 Plant & Machinery - 37,320 Electrical, mechanical and fire fighting equipments - 5,185 Vehicles 87,095 350,032 263,417 2,110,872

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.

4.2 During the preparation of this condensed interim consolidated financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainly were the same as those that were applied to the audited annual financial statements for the year ended December 31, 2016.

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.




Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016


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

March 31, 2017 (unaudited) 26,051 2,567 23,484

December 31, 2016 (audited) - note 5.4 6.2.1 60,196 6,546 53,650

6.2.1 For details of the assets disposed/ written off during the year ended December 31, 2016, please refer to the annual audited financial statements for the same year.

CostAccumuladedDepreciation

Net BookValue

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 March 31, 2017. The Group has 43.24 million shares (December 31, 2016: Rs. 43.24 million shares) as at March 31, 2017.

6.3 Capital work-in-progress Depot building 1,903,072 1,608,287 Pump building 210,115 250,137 Plant and machinery 77,900 22,319 Tanks and pipelines 697,760 649,540 Dispensing pumps 47,872 96,357 Computer auxilliaries 10,242 7,045 Electrical, mechanical and fire fighting equipments 430,941 365,453 Furniture, office equipments and other assets 121,014 110,014 Vehicles 134,850 109,971 Borrowing cost capitalized 160,084 123,214 Advances to suppliers 771,719 203,263 4,565,569 3,545,600

7 LONG-TERM INVESTMENTS Pakistan Refinery Limited - available-for-sale 7.1 3,446,985 1,886,977

7.1 Pakistan refinery Limited - "available-for-sale"

March 31, 2017 7.2.1 1,172,772 2,274,213 3,446,985 December 31, 2016 1,172,772 714,205 1,886,977

Cost Unrealizedgain

CarryingValue




Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016

8.1 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.

8.2 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.

8.3 This includes Rs. 6.15 million (December 31, 2016: Rs. 4.45 million) receivable from Sigma Motors (Private) Limited (a

related party). 9 LONG TERM FINANCES - SECURED

Term finance facility 901,340 945,007 Sukuk certificate 9.1 1,964,202 1,961,821 2,865,542 2,906,828 Current portion of long term finances Term finance facility 311,662 299,079 Sukuk certificate 400,000 300,000 (711,662) (599,079) 2,153,880 2,307,749 9.1 Sukuk certificate 9.2 2,000,000 2,000,000

Issuance cost Opening (38,179) - Addition - (47,731) Charged to profit and loss 2,381 9,552 (35,798) (38,179) 1,964,202 1,961,821

8 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Current portion of lease deposits 4,952 5,740 Prepaid rent 96,388 69,462 Prepaid insurance and others 54,586 14,001 Receivable from oil marketing companies 8.1 123,037 11,328 Receivable against regulatory duty 25,533 25,533 Inland Freight Equalization Margin (IFEM) receivable 1,450,021 1,024,234 Franchise income receivable 72,704 73,304 Price Differential Claims 8.2 5,083 5,083 Others 8.3 78,088 68,943 1,910,392 1,297,628





Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016

Note

UnauditedMarch 31,

2017

AuditedDecember 31,

2016


9.2 This represent privately placed long term islamic certificate (Sukuk) amounting to Rs. 2,000 million, issued by the Group during the year 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, starting from April 2017.

12 CONTINGENCIES AND COMMITMENTS 12.1 Contingencies 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: 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.

10 DEFERRED TAXATION - net This comprises the following: Taxable temporary difference arising in respect of : Accelerated depreciation (399,963) (354,233) Assets under finance lease (145,949) (129,683) Revaluation of fixed assets (498,669) (513,467) Exchange gain - (1,797) Surplus on remeasurement of investment (284,277) (89,276) Deductible temporary difference arising in respect of : Liabilities against assets subject to finance lease 206,461 182,677 Provision for : - retirement benefit 44,379 40,718 - doubtful debts 2,424 2,358 - franchise income 8,397 8,168 Investments in subsidiary 9,396 9,140 Turnover tax 187,954 250,605 (869,847) (594,790) 11 TRADE AND OTHER PAYABLES Trade creditors 23,850,374 22,260,329 Payable to cartage contractors 3,026,046 2,445,673 Advance from customers 4,074,626 4,253,932 Dealers' and customers' security deposits 178,500 170,000 Accrued liabilities 18,274 16,144 Other liabilities 860,080 690,730 Dividend payable 422,377 - 32,430,277 29,836,808




UnauditedMarch 31,

2017

AuditedDecember 31,

2016


Property, plant and equipment 749,186 758,237 Commitments for rental of assets under operating lease agreements / ijarah contracts as at March 31, 2017 amounted to

Rs 1,979 million (December 31, 2016 : Rs 1,984 million) as follows:

Not later than one year 178,907 173,461 Later than one year and not later than five years 651,188 642,427 Later than five years 1,149,389 1,167,834 1,979,485 1,983,722

13 TAXATION Current 212,463 83,564 Deferred 80,056 (49,957) 292,518 33,607 14 CASH GENERATED FROM OPERATIONS Profit before taxation 664,848 235,816 Adjustment for: Depreciation and amortization 123,802 89,409 Provision for gratuity 8,753 6,877 Gain on sale of fixed assets (728) - Finance cost 113,869 102,835 Working capital changes 14.1 477,159 (1,346,438) 1,387,702 (911,501)14.1 Changes in working capital

(Increase) / decrease in current assets Stock-in-trade 901,447 2,295,835 Trade debts (2,100,851) 711,506 Deposits, prepayments and other receivables (612,764) (927) Loans and advances - considered good (10,765) (312,488) (1,822,933) 2,693,926

Increase/ (decrease) in current liabilities Trade and other payables 2,300,092 (4,040,364) 477,159 (1,346,438)

12.2 Commitments The facility for opening letters of credit (LCs) acceptances as at March 31, 2017 amounted to Rs 33,550 million

(December 31, 2016 : Rs 30,550 million) of which the amount remaining unutilized as at that date was Rs 7,384 million (December 31, 2016 : Rs 3,631 million)

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




UnauditedMarch 31,

2017

AuditedDecember 31,

2016

UnauditedMarch 31,

2017

AuditedDecember 31,

2016

NoteMarch 31,

2017March 31,

2016


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.

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.

16 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 three months ended March 31, 2016.

17 EVENTS AFTER BALANCE SHEET DATE Shareholders in their annual general meeting held on April 28, 2017 have approved final cash dividend of Rs 3.5 per share

amounting to Rs. 422.38 million. This condensed interim consolidated financial information includes the effect of the aforementioned appropriation.

Subsequent to the balance sheet date, cash dividend is to be distributed to those shareholders whose name were

appearing on the Members’ Register as on the close of business on April 21, 2017.

15 RELATED PARTY TRANSACTIONS AND BALANCES

Nature of relationship Nature of transaction Associated companies Sigma Motors (Private) Limited Office rent 1,691 1,691 Staff retirement benefits / contribution funds Provident fund Contribution 4,339 3,080 Gratuity fund Contribution 8,753 6,876 Key management personnel Salaries and benefits 22,196 18,163 Director Fee Fee for attending meeting 2,050 1,100 Other related parties Consultancy services 4,275 3,180

Balances Associated companies Sigma Motors (Private) Limited Other receivable 6,149 4,458




March 31,2017

March 31,2016

UnauditedMarch 31,

2017

AuditedDecember 31,

2016


18 DATE OF AUTHORISATION These condensed interim consolidated financial information have been authorised for issue on April 28, 2017 by the

board of directors of the Group. 19 GENERAL All amounts have been rounded to the nearest thousand.



hpl marach 31 - 2017 final

Documents