First Quarter EndedMarch 2011
02 Company Information
03 Directors’ Report to the Shareholders
04 Balance Sheet
06 Profit and Loss Account
07 Statement of Changes in Equity
08 Cash Flow Statement
09 Notes to and Forming Part of the Financial Statements
Contents
Board of DirectorsSyed Babar Ali (Chairman)Shahid Hussain (Chief Executive)Khalid YacobKimihide AndoFaisal FaridSyed Hyder AliTetsuo Obana
Audit CommitteeKhalid Yacob (Chairman)Kimihide AndoFaisal FaridTetsuo Obana
Company SecretaryAdi J. Cawasji
Chief Financial OfficerAmjad Ali
Auditors and Tax AdvisorA. F. Ferguson & Co.Chartered Accountants
Legal AdvisorSattar & SattarKhan & Paracha
Websitewww.tripack.com.pk
Registered Office4th Floor, The Forum,Suite No. 416-422,G-20, Block No. 9, Clifton,Khayaban-e-Jami,Karachi - 75600, Pakistan.Tel: (021) 35874047-49
(021) 35831618Fax: (021) 35860251
BankersAskari Bank Limited
Bank Alfalah LimitedBank Al-Habib LimitedBank Islami Pakistan LimitedBarclays Bank PLC, PakistanCitibank N.A.Deutsche Bank A.G.Faysal Bank LimitedHabib Bank LimitedHSBC Bank Middle East LimitedMCB Bank LimitedMeezan Bank LimitedNIB Bank LimitedStandard Chartered Bank LimitedThe Bank of KhyberThe Bank of Tokyo-Mitsubishi UFJ, Ltd.
Head Office & WorksPlot No. G-1 to G-4,North Western Industrial Zone,Port Qasim Authority, Karachi.Tel : (021) 34720247-48Fax : (021) 34720245
Works & Sales OfficeHattarPlot No. 78/1, Phase IV,Hattar Industrial Estate,Hattar, Khyber Pakhtunkhwa,(Formerly N.W.F.P.).Tel: (0995) 617406-7Fax: (0995) 617054
Regional Sales OfficesKarachi101-106, Marine Pride, Block 7,Clifton, Karachi - 75600.Tel: (021) 35871801-2Fax: (021) 35871803
LahoreB-70/1, Gulberg III, Behind KFC,MM Alam Road, Lahore.Tel: (042) 35716068-70Fax: (042) 35873659
Company Information
Tri-Pack Films Limited Quarterly Report 201102
Directors’ Report to the Shareholders
Growth is in our Nature 03
The Directors are pleased to present quarterly report and un-audited financialstatements of the Company for the quarter ended March 31, 2011.
Financial Performance
By the Grace of Almighty, your Company registered a substantial growth in its salesand net profit during the period under review. We successfully managed tough businessconditions in the country, as well as, adverse effects of increase in crude oil prices inthe international market.
Comparison of the financial results with the corresponding period of 2010 is as follows:
1st Quarter2011 2010
Sales Volume - (M. Tonnes) 9,545 8,573Sales Value - (Million Rs) 2,390 1,719Gross Profit - (Million Rs) 442 239Net profit - (Million Rs) 192 87EPS - (Rs per share) 6.41 2.91
The net sales during the 1st quarter 2011 registered a remarkable increase of 39percent over the same period last year. Net profit during the 1st quarter is Rs. 192million as compared to Rs. 87 million for the same period last year. This has been theresult of efficient operations, management team work, consistent efforts of our staff,and successful marketing strategies.
Future Outlook
Our success lies in the continuous improvement in the operational efficiencies; deliveringquality products and services to our customers focused team work of our highlymotivated staff and promotion of high value added products. We are, therefore,confident to achieve our targets for the remaining period of 2011 despite unfavorablebusiness conditions.
Acknowledgement
The Board would like to thank our extremely valued stakeholders, whose cooperationand support plays a vital role in improving our products and services.
On behalf of the board
Shahid HussainChief Exeucutive Karachi – April 26, 2011
Condensed Interim Balance SheetAs at March 31, 2011 (Un-audited - note 2.1)
Tri-Pack Films Limited Quarterly Report 201104
Note March 31,2011
Rs ‘000
December 31,2010
Rs ‘000
SHARE CAPITAL AND RESERVES
Authorised capital 1,000,000 1,000,000
Issued, subscribed and paid-up capital 300,000 300,000
Reserves 1,383,526 1,491,125 1,683,526 1,791,125
NON-CURRENT LIABILITIES
Long-term finances 3 312,500 375,000
DEFERRED LIABILITIES
Deferred taxation 206,000 219,508
Accumulated compensated absences 15,363 13,016
CURRENT LIABILITIES AND PROVISIONS
Trade and other payables 5 1,824,937 1,443,822
Accrued mark-up 12,375 28,401
Short - term borrowings 4 550,000 295,873
Current portion of long-term finances 3 125,000 233,000 2,512,312 2,001,096
CONTINGENCIES AND COMMITMENTS 6 4,729,701 4,399,745
PROPERTY, PLANT AND EQUIPMENT 7 1,999,532 1,853,983
INTANGIBLES 16,009 17,836
LONG-TERM DEPOSITS 1,764 1,763
CURRENT ASSETS
Stores and spares 268,778 237,119
Stock-in-trade 1,337,752 1,052,338
Trade debts 8 876,997 767,252
Advances, prepayments and other receivables 85,766 39,313
Taxation 59,200 79,931
Cash and bank balances 83,903 350,210
2,712,396 2,526,163
4,729,701 4,399,745
The annexed notes 1 to 14 form an integral part of these condensed interim financialstatements.
Note March 31,2011
Rs ‘000
December 31,2010
Rs ‘000
Growth is in our Nature 05
Condensed Interim Balance SheetAs at March 31, 2011 (Un-audited - note 2.1)
Shahid HussainChief Exeucutive
Syed Hyder AliDirector
Shahid HussainChief Exeucutive
Syed Hyder AliDirector
Sales 2,935,597 2,088,113Less: sales tax and special excise duty 545,242 369,274Net sales 2,390,355 1,718,839
Cost of sales 9 1,948,584 1,480,037Gross profit 441,771 238,802
Distribution cost 54,966 32,750Administrative expenses 36,518 24,155
91,484 56,905Operating profit 350,287 181,897
Other income 6,561 9,710 356,848 191,607
Finance cost 28,778 50,966Other expenses 32,878 9,704
61,656 60,670Profit before taxation 295,192 130,937
Taxation
-Current 116,299 57,229 -Deferred (13,508) (13,522)
102,791 43,707Profit after taxation 192,401 87,230
Earnings per share - basic and diluted (Rupees) 6.41 2.91
Note: The appropriations of profits are set out in the condensed interim statement ofchanges in equity.
The annexed notes 1 to 14 form an integral part of these condensed interim financialstatements.
Condensed Interim Profit and Loss AccountFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Tri-Pack Films Limited Quarterly Report 201106
Note Quarter endedMarch 31,
2011Rs ‘000
Quarter endedMarch 31,
2010Rs ‘000
Growth is in our Nature 07
Condensed Interim Statement of Changes in EquityFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Balance at January 1, 2010 300,000 831,000 465,280 1,596,280
Transfer to general reserve - 164,000 (164,000) -
Dividend relating to the year ended December 31, 2009 @ 100% - - (300,000) (300,000)
Net profit for the first quarter ended March 31, 2010 - - 87,230 87,230
Balance at March 31, 2010 300,000 995,000 88,510 1,383,510
Balance at January 1, 2011 300,000 995,000 496,125 1,791,125
Transfer to general reserve - 194,000 (194,000) -
Dividend relating to the year ended December 31, 2010 @ 100% - - (300,000) (300,000)
Net profit for the first quarter ended March 31, 2011 - - 192,401 192,401
Balance at March 31, 2011 300,000 1,189,000 194,526 1,683,526
The annexed notes 1 to 14 form an integral part of these condensed interim financialstatements.
UnappropriatedProfit
Rs ‘000 Rs ‘000
TotalGeneralReserve
Rs ‘000
ShareCapital
Rs ‘000
Shahid HussainChief Exeucutive
Syed Hyder AliDirector
Shahid HussainChief Exeucutive
Syed Hyder AliDirector
Condensed Interim Cash Flow StatementFor the first quarter ended March 31, 2011 (Un-audited note 2.1)
Tri-Pack Films Limited Quarterly Report 201108
Note Quarter endedMarch 31,
2011Rs ‘000
Quarter endedMarch 31,
2010Rs ‘000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 11 36,480 241,226Payment on account of accumulated compensated absences (503) (1,303)Long-term deposits (1) -Staff retirement benefits paid (5,776) (2,939)Income taxes paid (95,568) (91,763)Net cash (outflow) / inflow from operating activities (65,368) 145,221
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditure (241,721) (6,944)Profit on bank balances received 91 110Sale proceeds on disposal of fixed assets 1,890 3,157Net cash outflow from investing activities (239,740) (3,677)
CASH FLOWS FROM FINANCING ACTIVITIES
Finance costs paid (44,804) (70,471)Long-term finance paid (170,500) (108,000)Dividend paid (22) (25)Net cash outflow from financing activities (215,326) (178,496)
Net (decrease) in cash and cash equivalents (520,434) (36,952)
Cash and cash equivalents at the beginning of the period 54,337 (376,546)
Cash and cash equivalents at the end of the period 12 (466,097) (413,498)
The annexed notes 1 to 14 form an integral part of these condensed interim financial statements.
Growth is in our Nature 09
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
1. INTRODUCTION
Tri-Pack Films Limited (the Company) was incorporated in Pakistan as a publiccompany on April 29, 1993 under the Companies Ordinance, 1984 (the Ordinance)and is listed on all the stock exchanges in Pakistan. The registered office of theCompany is situated at 4th floor, the Forum, Suite No. 416 to 422, G-20, Block-9,Khayaban-e-Jami, Clifton, Karachi.
The Company is principally engaged in the manufacture and sale of BiaxiallyOriented Polypropylene (BOPP) film and Cast Polypropylene (CPP) film.
2. BASIS OF PRESENTATION
2.1 These condensed interim financial statements of the Company for the threemonths period ended on March 31, 2011 have been prepared in accordancewith the requirements of the International Accounting Standard No. 34 'InterimFinancial Reporting' and are being submitted to the shareholders as requiredunder section 245 of the Ordinance and the listing regulations of the Karachi,Lahore and Islamabad Stock Exchanges.
The condensed interim financial statements comprise of the condensed interimbalance sheet as at March 31, 2011 and the condensed interim profit and lossaccount, condensed interim statement of changes in equity and the condensedinterim cash flow statement for the quarter ended March 31, 2011.
The comparative balance sheet presented in these condensed interim financialstatements as at December 31, 2010 has been extracted from the auditedfinancial statements of the Company for the year ended December 31, 2010whereas the comparative condensed interim profit and loss account, condensedinterim statement of changes in equity and condensed interim cash flow statementare for the quarter ended March 31, 2010.
2.2 The accounting policies adopted in the preparation of these financial statementsare the same as those applied in the preparation of the financial statements ofthe Company for the year ended December 31, 2010.
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Tri-Pack Films Limited Quarterly Report 201110
March 31,2011
Rs ‘000
December 31,2010
Rs ‘000
3. LONG-TERM FINANCES
Secured
Finance 1 - note 3.1 - 100,000Finance 2 - note 3.2 - 8,000Finance 3 - note 3.3 437,500 500,000
437,500 608,000Less: Amounts payable within twelve months shown under current liabilities 125,000 233,000
312,500 375,000
3.1 The Company had obtained a long-term finance facility of Rs 1,000 million(December 31, 2010: Rs 1,000 million) from a commercial bank under mark-uparrangements. Mark-up was payable on quarterly basis at the rate of base rateplus 1% per annum. The base rate is the simple average of last three cut-offyields of six months treasury bills of the State Bank of Pakistan. The effectiverate of mark-up during the three months was 14.39% (December 31, 2010:13.34%) per annum. The principal amount was repayable in ten equal semi-annual installments commencing after thirty months inclusive of two years graceperiod from the date of first draw down. This facility was secured by first paripassu hypothecation/mortgage charge on all of the Company's present andfuture fixed assets including but not limited to land, buildings, plant and machinery,equipment, furniture and fixtures, etc. Last installment has been paid duringMarch 2011.
3.2 The Company had obtained a long-term finance facility of Rs 100 million (December31, 2010: Rs 100 million) from a commercial bank under mark-up arrangementsout of which the Company has availed Rs 80 million (December 31, 2010: Rs80 million). Mark-up was payable on quarterly basis at the rate of three monthsKarachi Inter Bank Offer Rate (KIBOR) plus 1% per annum. The effective rate ofmark-up during the three months was 14.46% (December 31, 2010: 13.50%)per annum. The principal amount was repayable in ten equal semi-annualinstallments commencing after thirty months inclusive of two years grace periodfrom the date of first draw down. This facility was secured by first pari passuhypothecation/mortgage charge on all of the Company's present and future fixedassets including but not limited to land, buildings, plant and machinery, equipment,furniture and fixtures, etc. Last installment has been paid during March 2011.
3.3 The Company had obtained a long-term finance facility of Rs 500 million (2010:Rs 500 million) from a commercial bank under mark-up arrangements. Mark-upis payable in arrears on a semi-annual basis at the rate of six months KIBORplus 0.50 percent per annum. The effective rate of mark-up during the threemonths was 13.38% (December 31, 2010: 13.11%) per annum. The principalamount is repayable in 8 equal installments commencing after six months witha grace period of two years from the date of first draw down. The facility issecured by first pari passu hypothecation/ mortgage charges on all the Company's
Growth is in our Nature 11
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
March 31,2011
Rs ‘000
December 31,2010
Rs ‘000
present and future assets including but not limited to land, buildings plant andmachinery, equipment, furniture and fixture etc.
3.4 The Company has signed agreements for long term finance facilities of Rs 4,000million (2010: Rs 2000 million) from commercial banks under mark-uparrangements. Mark-up is payable in arrears on a semi-annual basis at the rateof six months Karachi Inter Bank Offer Rate (KIBOR) plus 0.75 percent perannum. The Company had not drawn down any amount under this facility uptoMarch 31, 2011. The principal amount will be repayable in 10 equal semi-annualinstallments commencing after thirty months with a grace period of two yearsfrom the date of first draw down. This facility is secured by first pari passuhypothecation / mortgage charge on all of the Company's present and futurefixed assets including but not limited to land, buildings, plant and machinery,equipment, furniture and fixtures etc.
4. SHORT-TERM FINANCES - SECURED
Short-term finances are under mark-up arrangement with banks payable onvarious maturity dates upto September 15, 2011. These facilities are securedby joint hypothecation by way of first floating charge over current assets includingbut not limited to stores and spares, stock-in-trade and trade debts. Rate ofmark-up applicable to these facilities ranges between 13.45% to 15.03%(December 31, 2010: 12.80% to 14.14%) per annum. Total facilities availableunder mark-up arrangements aggregated Rs 3,000 million (December 31, 2010:Rs 3,000 million) out of which the amount unavailed at the period end was Rs2,450 million (December 31, 2010: Rs 2,704 million).
5. TRADE AND OTHER PAYABLES
These include Rs 5.206 million (December 31, 2010: Rs 3.564 million) payable torelated parties.
6. CONTINGENCIES AND COMMITMENTS
Contingencies
Guarantees issued by banks on behalf of the Company 75,872 58,227
CommitmentsLetter of credit for purchase of raw material
and spares 947,812 956,076Letters of credit for purchase of items of
plant and machinery 1,513,267 1,557,846
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Tri-Pack Films Limited Quarterly Report 201112
March 31,2011
Rs ‘000
December 31,2010
Rs ‘000
Quarter endedMarch 31,
2011Rs ‘000
Quarter endedMarch 31,
2010Rs ‘000
Quarter endedMarch 31,
2011Rs ‘000
Quarter endedMarch 31,
2010Rs ‘000
6.1 The facilities for opening of letter of credits and for guarantees as at March 31,2011 amount to Rs 6,776 million (December 31, 2010: Rs 6,776 million) andRs 210 million (December 31, 2010: Rs 210 million), of which the amountremaining unutilized was of Rs 4,222 million (December 31, 2010: Rs 3,198million) and Rs 134.128 million (December 31, 2010: Rs 151.773 million)respectively.
7. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets - note 7.1 1,771,394 1,844,554Capital work-in-progress 228,138 9,429
1,999,532 1,853,983
7.1 Operating fixed assets
Additions 23,013 6,903
Disposals [having a net book value of Rs.1,490 million (2010: Rs 1,193)] 2,657 4,202
8. TRADE DEBTS
Considered good
These include Rs. 72.204 million (December 31, 2010: Rs 22.009 million)receivable from related parties.
9. COST OF SALES
Opening stock of finished goods 11,994 36,544Cost of goods manufactured - note 9.1 1,958,329 1,474,201Less: Closing stock of finished goods (21,739) (30,708)
1,948,584 1,480,037
Growth is in our Nature 13
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Quarterended
March 31,2011
Rs ‘000
Quarterended
March 31,2010
Rs ‘000
9.1 Cost of goods manufactured
Opening stock of work-in-process 75,308 126,043
Raw materials consumed - note 9.2 1,557,387 1,153,218
Manufacturing expenses 52,046 -
Salaries, wages and other benefits 64,100 46,316
Fuel, power and water 116,858 97,283
Packing material consumed 45,666 37,485
Repairs and maintenance 28,417 20,932
Insurance 7,418 8,336
Vehicle running and maintenance 5,075 3,838
Travelling 1,611 1,395
Staff retirements benefits 6,380 4,267
Depreciation 93,159 86,232
Others 357 326
2,053,782 1,585,671
Less: Closing stock of work-in-process (95,453) (111,470)
1,958,329 1,474,201
9.2 Raw materials consumed
Opening stock 954,619 640,419
Purchases 1,929,611 1,159,249
Closing stock (1,326,843) (646,450)
1,557,387 1,153,218
Purchases of goods and servicesIGI Insurance Limited Insurance services 36,761 43,567Mitsubishi Corporation, Japan Raw material 2,319 -Packages Limited Goods and services 7,679 6,878Siemens Pakistan EngineeringCompany Limited Goods and services 3,183 3,159
49,942 53,604
Sales of goods & servicesPackages Lanka (Private) Limited Supplies - 7,034Packages Limited Supplies 225,598 115,091Tetra Pak Pakistan Limited Supplies 3,284 1,425Nestle Pakistan Limited Supplies 459 -
229,341 123,550
Purchase of an assetTetra Pak Pakistan Limited Porta cabin office 2,640 -
Contributions to staff retirement benefit fundsGratuity fund Contribution 2,300 898Pension fund Contribution 3,294 2,087Provident fund Contribution 1,946 1,273
7,540 4,258CommissionIGI Insurance Limited Insurance commission - 3,949
Other IncomeIGI Insurance Limited Insurance claim - 179
Key management personnel-Salaries and other
short-term employees' benefits 10,244 9,079-Post retirement benefits 1,205 1,012
11,449 10,091
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Tri-Pack Films Limited Quarterly Report 201114
Nature oftransactions
Quarterended
March 31,2011
Rs ‘000
Quarterended
March 31,2010
Rs ‘000
Name and Particulars
10. TRANSACTIONS WITH RELATED PARTIES
Quarterended
March 31,2011
Rs ‘000
Quarterended
March 31,2010
Rs ‘000
Growth is in our Nature 15
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
11. CASH GENERATED FROM OPERATIONS
Profit before taxation 295,192 130,937
Adjustment for non cash charges and other items:Depreciation 96,509 87,640Provision written back - (174)Provision for retirement benefits 5,408 3,802Profit on bank balances (91) (110)Profit on disposal of fixed assets (400) (1,964)Provision for accumulated compensated absences 2,850 1,950Finance cost 28,778 50,966Working capital changes - note 11.1 (391,766) (31,821)
36,480 241,226
11.1 Working capital changes
(Increase) / decrease in current assets:
Stores and spares (31,659) (23,066)Stock-in-trade (285,414) 137,532Trade debts (109,745) (42,180)Advances, prepayments and other receivables (46,453) (28,293)
(473,271) 43,993Increase / (Decrease) in current liabilities:
Trade and other payables 81,505 (75,814)(391,766) (31,821)
March 31,2010
Rs ‘000
Notes to and Forming Part of the Financial StatementsFor the first quarter ended March 31, 2011 (Un-audited - note 2.1)
Tri-Pack Films Limited Quarterly Report 201116
March 31,2011
Rs ‘000
Quarterended
March 31,2010
(Metric tonnes)
Quarterended
March 31,2011
(Metric tonnes)
Cash and bank balances 83,903 206,795Short term finances - note 4 (550,000) (620,293)
(466,097) (413,498)
13. PLANT CAPACITY AND ACTUAL PRODUCTION
Operational capacity available during the period 8,950 8,700Production 8,703 8,517
14. DATE OF AUTHORISATION FOR ISSUE
These financial statements were authorised for issue on April 26, 2011 by the boardof directors of the Company.
12. CASH AND CASH EQUIVALENTS
Shahid HussainChief Exeucutive
Syed Hyder AliDirector
Registered Office4th Floor, The Forum, Suite No. 416-422G-20, Block No. 9, Clifton, Khayaban-e-Jami,Karachi-75600, Pakistan.Tel: 92 21-3587 4047-49, 3583 1618Fax: 92 21-3586 0251
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