Company Information 2. Directors Report to the Members 3. Directors Report to the Members (Urdu) 6. Consolidated Balance Sheet 7

Transcription

1 CONTENTS Company Information 2 Directors Report to the Members 3 Directors Report to the Members (Urdu) 6 Condensed Interim Consolidated Financial Statements Consolidated Balance Sheet 7 Consolidated Profit and Loss Account 8 Consolidated Statement of Comprehensive Income 9 Consolidated Statement of Cash Flows 10 Consolidated Statement of Changes in Equity 11 Notes to the Consolidated Financial Statements 12 Condensed Interim Unconsolidated Financial Statements of The Searle Company Limited Directors Report to the Members 24 Directors Report to the Members (Urdu) 27 Balance Sheet 28 Profit & Loss Account 29 Statement of Comprehensive Income 30 Statement of Cash Flows 31 Statement of Changes in Equity 32 Notes to the Financial Statements 33

2 COMPANY INFORMATION Board of Directors Legal Advisors Mr. Adnan Asdar Ali Chairman Mohsin Tayebaly & Co. Mr. Rashid Abdulla Mr. Husain Lawai Bankers Mr. S. Nadeem Ahmed Chief Executive Officer Albaraka Bank (Pakistan) Limited Mr. Zubair Palwala Bank Al Habib Limited Mr. Ayaz Abdulla Bank Alfalah Limited Mr. Arshad Anis Bank of Punjab Mr. Mufti Zia Ul Islam Dubai Islamic Bank Pakistan Limited Faysal Bank Limited Board of Audit Committee Habib Bank Limited Mr. Husain Lawai Chairman Habib Metropolitan Bank Limited Mr. Ayaz Abdulla Member MCB Bank Limited Mr. Arshad Anis Member Meezan Bank Limited National Bank of Pakistan Board of HR & Remuneration Committee Silk Bank Limited Mr. Shahid Abdulla Chairman Soneri Bank Limited Mr. Ayaz Abdulla Member Standard Chartered Bank (Pakistan) Limited Mr. Arshad Anis Member Registered Office Chief Financial Officer First Floor, N.I.C. Building, Abbasi Shaheed Road Mr. Mobeen Alam Off: Shahrah-e-Faisal, Karachi. Company Secretary Share Registrar Mr. Zubair Palwala Central Depository Company of Pakistan Limited Head Office, CDC House, 99-B, Block B Auditors S.M.C.H.S., Main Shahrah-e-Faisal A.F. Ferguson & Co. Karachi

3 DIRECTORS REPORT TO THE MEMBERS We are pleased to present the financial information of your Company and its subsidiaries (the group) for the three months ended September 30, These financial statements have been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 Interim Financial Reporting and the provisions of the directives issued under the Companies Ordinance, In case where requirements differ, the provision of directives issued under the Companies Ordinance, 1984 have been followed. OPERATING RESULTS September 30, (Rupees in thousand) Revenue 3,368,743 2,718,699 Gross profit 1,799,465 1,414,418 Operating expenses 843, ,173 Operating profit 955, ,245 Profit before taxation 915, ,145 Profit after taxation 769, ,898 Searle is continuously emerging stronger and is ready to embark on a new era as a resourcerich and fully integrated group of companies. Keeping the convention alive, the first quarter ended September 30, 2016 was yet again a phenomenal quarter for our stakeholders. Financial highlights are summarized below: Net sales of the holding Company amounted to Rs. 3, million, registering a growth of 24% over the corresponding period of last year. Gross profit margin of the holding company grew by 1.39% and stood at 53.42% as compared with 52.03% of the corresponding period of the prior year. Operating expenses as percentage of sales increased nominally by 1.38% as a result of overall market conditions. Operating profit, Profit before taxation and Profit after taxation of the company increased substantially by 24%, 33% and 36% respectively. The growth was driven by expanding doctor coverage, maturing product portfolio, higher volumes, richer product mix, branding efforts and strengthened demand. Further, tighter control over costs and expenses contributed their part in the improved financial performance of the company. 12 EARNINGS PER SHARE Basic earning per share after taxation was Rs (2015: Rs. 4.70). There is no dilution effect on the basic earnings per share of the Company, as the Company has no convertible dilutive potential ordinary shares outstanding as at September 30, Quarterly Report September

4 DIRECTORS REPORT TO THE MEMBERS FUTURE OUTLOOK The sum and substance of the existence of Searle, is based on the doctrine, service of mankind. We are functioning in full swing to make availability of adequate healthcare solutions certain, for the masses. Nationally and throughout the rapidly increasing cross border destinations, people rely on Searle, the new destination of possibilities, to help them get healthy throughout their lives. We expect to evolve as a company with an interesting mix of high value Bio Similar and complex branded generic products with emerging Nutritional range. We are persistently working for patients across the country and the respective markets, where we exist. Continuing our endeavors, we are developing Nutritional products and supplements and are trying to explore the possibilities for setting up a manufacturing facility in Europe and proceeding for USFDA approval for Bio Similar range. This evolution entails taking multiple initiatives, organic and inorganic, as well as higher risks. While not all these initiatives may give the desired results, we are gearing up the group companies to maximize the odds of succeeding and minimize the disruption due to failure. Adding new Markets and launching high tech products with targeted improved productivity would fairly improve our profitability. In the long-term, Searle is targeting sustainable growth, faster than the market, both locally and internationally. Close focus on Bio Similar business will add significant high value to the patient s life along with more profits for the shareholders. ACKNOWLEDGEMENT We wish to thank the customers for their faith in our products, and their continuing patronage. We also take this opportunity to thank our suppliers, bankers and distributors for providing us with their valuable support throughout the period. Finally we wish to thank our staff who remained committed to deliver towards the growth of your Company. For and on behalf of the board Karachi October 27, 2016 Syed Nadeem Ahmed Chief Executive Officer 4

5 ی ٹ ڈارئ رز یک روپرٹ رباےئ صصح ی ااگتفن ا ا ڈا آ دى ز ى آرڈ ڈا ر ا ں م ا س ا ا د د وپ ل ں ز م ا ا ت ا رون ا ور ر د ں ا د وپ ل ت ا ز ا ور ا ا دا رہ ا رو ر ا ر ا وپ رت ا ر ا ے ز د آ ر م ر ں ر رى ں ں ں ر ا ور دہ ر ا ور ر ر ا و رى ر ا ت ا ور ا ر ا زت USFDA ر ا ور ا رپ ا ا ت ات ا ن م ا ا ت ا ور ا ور ر ر ڈا راہ وپ ا رف ت ا ور ں ر ر ا ن ت ف رے وا رى ا ا ا ا رى ل ر ا زا ر دو ں ل وپ ف و ا زا ت ن د ز ں رو ر ں ا ر ا اس آں ا د ا ور ون ا ن ا ر ر ت ا ز م ا آ ا دا ا ن ون ل ز ز ز ا ور ڈ ى ا ر ت ا م د وپ ں ر رڈ ا ا آ 27 ا 2016 ا Quarterly Report September

6 ی ٹ ڈارئ رز یک روپرٹ رباےئ صصح ی ااگتفن س آپ وپ وا ت ت ا ؤ ا رڈ ' Reporting (IAS-34) - 'Interim Financial ا ور ا ت ں رت ا ر ں ت ا دہ رى 1984 آرڈ ا ں آرڈ 1984 رى ا ت ں درآ آ (رو ا روں ( 2,718,699 3,368,743 آ 1,414,418 1,799, , ,513 آ ا ا ت 771, ,952 آ ت 689, ,587 ا ز 566, ,611 ز ا آف وپ دوا ز ور ا و ا ل ر ا م ر ا ور ا وا 2016ء 30 روا ر دا دور : ذ ر ں درج ا رز رے 24 زا اس ت ل ر رو 3, ر53.42 ل اس ت ا ور ا ا 1.39 ح ر ا 1.38 ب ح آ ا ا ت و ر ل ر ا ح 33 ا ور ا ور ا ز آ ت ا ز ا ا ا اڈ و رٹ وڈ ا ر ڈا ر ن ا م ا آں ا ور ا ا ت ول ا ر ا ور ں ا دا ر ا دا 12 در آ رو 6.38 ا ز آ دى ( 2015 ء: 4.70 رو ) 6

7 CONDENSED INTERIM CONSOLIDATED BALANCE SHEET As at September 30, 2016 Un-audited Audited 30/Sep/16 30/Jun/16 ASSETS Note (Rupees in 000) Non-current assets Fixed assets - Property, plant and equipment 5 1,482,336 1,437,042 - Intangible assets 6 300, ,961 1,782,443 1,685,003 Investment properties 2,597,465 2,607,507 Long-term investment Long-term loans 448, ,534 Long-term deposits 5,026 5,026 Deferred cost 66,680 66,680 Total non-current assets 4,900,166 4,684,750 Current assets Stores and spares 1,013 1,004 Stock-in-trade 1,530,387 1,533,770 Trade debts 7 3,763,819 2,988,769 Loans and advances 1,315, ,701 Trade deposits and short term prepayments 165, ,947 Other receivables 464, ,627 Short term investments 106,472 99,593 Advance Tax 464, ,088 Cash and bank balances 8 49, ,001 Total current assets 7,859,492 6,812,500 Total assets 12,759,658 11,497,250 EQUITY AND LIABILITIES Shareholders equity Authorized share capital 140,000,000 (June 2016: 140,000,000) ordinary shares of Rs. 10 each 1,400,000 1,400,000 Issued, subscribed and paid-up capital 9 1,227,523 1,227,523 -General reserve 280, ,251 -Share premium accoount 1,630,974 1,630,974 -Unappropriated profit 5,003,185 4,243,292 Equity attributable to the Holding Company s shareholders 8,141,933 7,382,040 Non controlling interest 404, ,203 Total equity 8,546,854 7,777,243 Surplus on revaluation of fixed assets 296, ,961 Non-current liabilities Long term finances - secured 428, ,953 Deferred liabilities Taxation 37,604 37,604 Gratuity - unfunded 42,687 42,247 80,291 79,851 Total non-current liabilities 508, ,804 Current portion of long term finances 214, ,286 Short-term finances 349, ,577 Trade and other payables 2,811,861 2,154,673 Accrued mark-up 31,681 11,706 Total current liabilities 3,406,981 2,856,242 Total liabilities 3,915,843 3,423,046 Contingencies and commitments 10 Total equity and liabilities 12,759,658 11,497,250 The annexed selected notes from 1 to 17 form an integral part of this condensed interim consolidated financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director Quarterly Report September

8 CONDENSED INTERIM CONSOLIDATED PROFIT AND LOSS ACCOUNT - UN-AUDITED For the period ended September 30, 2016 Quarter ended 30/Sep/ /Sep/2015 Note (Rupees in 000) NET SALES 3,368,743 2,718,699 COST OF SALES 1,569,278 1,304,281 GROSS PROFIT 1,799,465 1,414,418 Selling and distribution expenses 691, ,283 Administrative expenses 152,277 87, , ,173 OPERATING PROFIT 955, ,245 Other operating income 55,573 24,444 Other operating expenses 1,011, ,689 - Financial charges 26,368 40,538 - Share of loss from associate - 2,857 - Other charges 69,570 63,149 95, ,544 PROFIT BEFORE INCOME TAX 915, ,145 Income tax expense 145, ,247 PROFIT FOR THE PERIOD 769, , (Rupees) EARNINGS PER SHARE - BASIC AND DILUTED The annexed selected notes from 1 to 17 form an integral part of this condensed interim consolidated financial information. 8 Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director

9 CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - UN-AUDITED For the period ended September 30, 2016 Quarter ended 30/Sep/ /Sep/ (Rupees in 000) PROFIT FOR THE PERIOD 769, ,898 Other comprehensive income Items that may be reclassified to profit and loss account subsequently Items that will not be subsequently reclassified to profit and loss account TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 769, ,898 Total comprehensive income attributable to: Shareholders of the holding Company 759, ,431 Non-controlling interest 9,718 23, , ,898 The annexed selected notes from 1 to 17 form an integral part of this condensed interim consolidated financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director Quarterly Report September

10 CONSOLIDATED STATEMENT OF CASH FLOWS - UN-AUDITED For the period ended September 30, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Quarter ended 30/Sep/ /Sep/2015 Note (Rupees in 000) Cash generated from operations after working capital changes ,339 1,059,012 Gratuity paid (510) - Taxes paid (50,215) (306,178) Recovery of long-term loans (128,018) (14) Advance of short-term loans (432,384) (181,514) Net cash generated from operating activities 239, ,306 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipments (70,165) (38,199) (Additions to) / transfer from capital work in progress - net (967) - Purchase of intangible assets (55,426) - Expenditures incurred on investment property (1,534) (7,232) Short term investments (69,000) (35,000) Long-term investments - (50,887) Proceeds from disposal of property, plant and equipment 6,307 3,245 Proceeds from redemption of investments 63,082 25,059 (Expenses claimed) / Mark-up received from (7,119) (15,269) associated company - net Net cash used in investing activities (134,822) (118,283) CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid (22) 13,494 Long-term finance paid (58,382) - Financial charges paid (6,393) (14,858) Net cash used in financing activities (64,797) (1,364) Net increase in cash and cash equivalents 39, ,659 Cash and cash equivalents at the beginning of the period (339,576) (529,458) Cash and cash equivalents at the end of the period 13 (299,983) (77,799) (299,983) (77,799) The annexed selected notes from 1 to 17 form an integral part of this condensed interim consolidated financial information. 10 Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director

11 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period ended September 30, 2016 Share capital Capital Reserve Reserve for bonus Revenue Reserve General reserve Total reserves Share premium account Unappropriated profit Equity attributable to the Holding Company s shareholders Non controlling interest Share holders equity Rupees in Balance as at July 01, , , ,251-3,562,012 4,700, ,627 5,019,297 Total comprehensive income for the period , ,431 23, ,898 Balance as at September 30, , , ,251-4,105,443 5,244, ,094 5,586,195 Balance as at July 01, ,227, , ,251 1,630,974 4,243,292 7,382, ,203 7,777,243 Total comprehensive income for the period , ,893 9, ,611 Balance as at September 30, ,227, , ,251 1,630,974 5,003,185 8,141, ,921 8,546,854 The annexed selected notes from 1 to 17 form an integral part of this condensed interim consolidated financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director Quarterly Report September

12 SELECTED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, LEGAL STATUS AND OPERATIONS The Group consist of: Holding company - The Searle Company Limited (the Holding Company) Subsidiary companies - IBL HealthCare Limited - Searle Pharmaceuticals (Private) Limited - Searle Laboratories (Private) Limited - Searle Biosciences (Private) Limited IBL Identity (Private) Limited {formerly Al-Abid Exports (Private) - Limited} - Nextar Pharma (Private) Limited The Holding Company was incorporated in Pakistan as a private limited company in October In November 1993, the Holding Company was converted to a public limited company. Its shares are quoted on the Pakistan Stock Exchange. The Holding Company is principally engaged in the manufacture of pharmaceutical products and other consumer products. In addition, the Holding Company is engaged in sale of food and consumer products, and manufacture of pharmaceutical products for other companies. The registered office of the Holding Company is situated at First Floor, N.I.C. Building, Abbasi Shaheed Road, Karachi. International Brands Limited is the ultimate holding company as it holds 55.36% of the total paid-up share capital of the Holding Company. 2 STATEMENT OF COMPLIANCE This condensed interim consolidated financial information of the Company for the period ended September 30, 2016 has 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, In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. This un-audited condensed interim consolidated financial information constitutes separate condensed interim financial statements of the Company and are being presented and submitted to the shareholders as required by Listing Regulations of Pakistan Stock Exchange and under Section 245 of the Companies Ordinance, This condensed interim consolidated financial information do not include all information and disclosures required in the financial statements and should be read in conjunction with the financial statements of the Company for the year ended June 30,

13 3 SIGNIFICANT ACCOUNTING INFORMATION AND POLICIES The accounting policies and method of computations adopted in the preparation of this condensed interim consolidated financial information are the same as those applied in the preparation of the financial statements for the year ended June 30, ACCOUNTING ESTIMATES AND JUDGEMENTS The estimates, judgments and associated assumptions used in the preparation of this condensed interim consolidated financial information are consistent with those applied in the preparation of the financial statements of the Company for the year ended June 30, /Sep/16 30/Jun/2016 Note (Rupees in 000) PROPERTY, PLANT AND EQUIPMENT Operating fixed assets , ,925 Capital work in progress 593, ,117 1,482,336 1,437, Details of additions and disposals to operating assets during the period ended September 30, 2016 are as follows: Additions at cost Deletions at net book value Owned assets Building on Leasehold Land 14,657 - Plant and machinery 44,404 - Office and electrical equipments 10,465 (54) Air - conditioning Furniture & Fixture 85 - Vehicles - (5,385) September 30, ,165 (5,439) June 30, ,853 (3,624) 30/Sep/16 30/Jun/ INTANGIBLE ASSETS (Rupees in 000) Operating intangible assets 33,179 32,311 Capital work in progress - at cost 97,824 46,546 Goodwill 169, , , ,961 Quarterly Report September

14 SELECTED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, TRADE DEBTS 30/Sep/16 30/Jun/2016 Note (Rupees in 000) Considered good - Secured: Export debtors 109,747 56,211 - Unsecured: Due from: - associated companies 7.1 3,242,080 2,406,638 - others 411, ,920 3,654,072 2,932,558 Considered doubtful - others 2,287 2,287 Less: Provision for doubtful debts (2,287) (2,287) - - 3,763,819 2,988, The receivable is stated net of amounts payable aggregating Rs million (June 30, 2016: Rs million) on account of expenses claimed by the associated company. 8 CASH AND BANK BALANCES 30/Sep/16 30/Jun/ (Rupees in 000) Cash in hand 2,410 2,998 Cheques in hand - 10,000 Cash with banks in: - deposit accounts current accounts 46, ,977 49, ,001 14

15 9 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL Ordinary shares of Rs. 10 each 30/Sep/16 30/Jun/ /Sep/16 30/Jun/2016 (Number of shares) (Rupees in 000) ,969,000 3,969,000 Fully paid in cash 39,690 39,690 24,000 24, ,175, ,175,190 8,584,074 8,584,074 Issued for consideration other than cash Issued as fully bonus share Issued as fully right share ,101,752 1,101,752 85,841 85, ,752, ,752,264 1,227,523 1,227, CONTINGENCIES AND COMMITMENTS There is no change in the contingencies and commitment since the last financial year ended June 30, 2016 except the following: 10.1 Contingencies The facility for opening letters of credit (LCs) acceptances and guarantees as at September 30, 2016 amounted to Rs. 1,520 million (June 30, 2016: Rs. 1,520 million) of which the amount remaining unutilized as at period end amounted to Rs. 876 million (June 30, 2016: Rs. 751 million) Commitments Future rentals payable against operating lease arrangement During the year ended June 30, 2010, the Company obtained factory building at Karachi on rent for a period of 5 years. The rent agreement was revised in December The Company has also entered into operating lease arrangements with Myplan Pharmaceuticals (Private) Limited and S.A.Pharma, a pharmaceutical concern, respectively, for a period of 20 years. Lease includes land and building located at Lahore and plant and machinery installed in leased building. Quarterly Report September

16 SELECTED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, 2016 The details of future rentals over lease period are as follows: 30/Sep/16 30/Jun/ (Rupees in 000) Not later than one year 21,625 22,683 Later than one year but not later than five years 102, ,944 Later than five years 218, , , , EARNINGS PER SHARE - Basic and Diluted 30/Sep/ /Sep/2015 Basic earnings per share Profit for the period (Rupees in thousands) 769, ,898 Weighted average number of shares in thousands 120, ,550 Earnings per share (Rupees) Diluted earning per share There is no dilution effect on the basic earning per share of the Company as the Company has no such commitments. 12 CASH GENERATED FROM OPERATIONS AFTER WORKING CAPITAL CHANGES 30/Sep/16 30/Sep/2016 Note (Rupees in 000) Profit before taxation 915, ,145 Adjustments for non-cash items and other items: Depreciation 32,355 25,273 Amortization of intangible assets 2,902 2,810 Gain on disposal of property, plant and equipment - net (868) (2,935) Provision for staff retirement gratuity Negative goodwill - (6,269) Share of loss from associates - 2,857 Gain on disposal of investment (461) Unrealized gain on investments (500) (1,501) Financial charges - net 26,368 40,538 Net increase in working capital 12.1 (125,994) 308, ,339 1,059,012 16

17 12.1 Working capital changes 30/Sep/16 30/Sep/2015 (Rupees in 000) Current assets Decrease in stores and spares (9) - (Increase)/decrease in stock-in-trade 3,383 97,186 (Increase)/decrease in trade debts (775,050) 57,372 Increase in trade deposits and short term prepayments 21,751 (29,622) (Increase)/decrease in other receivables (33,277) (50,170) (783,202) 74,766 Current liabilities Increase/(decrease) in trade and other payables 657, ,578 Net increase in working capital (125,994) 308, CASH AND CASH EQUIVALENTS Cash and bank balances 49,170 96,703 Short term finances (349,153) (174,502) (299,983) (77,799) 14 SEGMENT INFORMATION A segment is a distinguishable component of the Company that is engaged in business activities from which the Company earns revenues and incur expenses and its results are regularly reviewed by the Company s Chief Operating Decision Maker to make decision about resources to be allocated to the segment and assess its performance. Further, discrete financial information is available for each segment. Based on internal management reporting structure and products produced and sold, the Company is organised into the following three operating segments: - Pharmaceutical - Consumer - Investment property Management monitors the operating results of above mentioned segments separately for the purpose of making decisions about resources to be allocated and for assessing performance. Quarterly Report September

18 SELECTED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, 2016 Segment revenue, segment result, costs, assets and liabilities for the period are as follows: Pharmaceutical Consumer Investment Property Total 30/Sep/ /Sep/ /Sep/ /Sep/ /Sep/ /Sep/ /Sep/ /Sep/ (Rupees in 000) Segment revenue 2,995,922 2,073, , ,377 26,831 27,450 3,368,743 2,718,699 Segment result 807, , , ,404 (5,381) - 955, ,245 Unallocated income and expenses Other operating income 55,573 24,444 Finance cost (26,368) (40,538) Share of loss from associate - (2,857) Other charges (69,570) (63,149) Profit before taxation 915, ,145 Income tax expense (145,976) (122,247) Profit for the period 769, ,898 Depreciation 17,266 21,742 3,513 3,531 11,576-32,355 25,273 Sep 30, 2016 Pharmaceutical Consumer Investment Property Total Jun 30, 2016 Sep 30, 2016 Jun 30, 2016 Sep 30, 2016 Jun 30, 2016 Sep 30, 2016 Jun 30, (Rupees in 000) Segment assets and liabilities Segment assets 227, ,781 26,285 13,837 2,597,465 2,607,507 2,851,353 2,838,125 Unallocated assets 9,908,305 8,659,125 Total assets 12,759,658 11,497,250 Segment liabilities , , , ,857 Unallocated liabilities ,272,986 2,780,189 Total Liabilities 3,915,843 3,423,046 Additions in segment assets 62, ,148 7,206 15,818-77,559 70, ,525 Percentage for allocation 88.93% 76.28% 10.27% 22.71% 0.80% 1.01% % % 18

19 14.1 Geographical segments 30/Sep/16 30/Sep/ (Rupees in 000) Net sales by region Pakistan 3,111,117 2,468,762 South Asia 178, ,145 East Africa - 1,907 South East Asia 78, ,656 Middle East - 2, ,368,743 2,718,699 The geographical segment has been categorized using United Nation s composition of macro geographical (continental) regions The Company has presented the net sales amounts for the current and comparative prior period The Group s revenue from one of the major customer represents approximately Rs billion (September 30, 2015: Rs billion) of the total revenues. 15 Transactions 30/Sep/16 30/Sep/ (Rupees in 000) (i) IBL Operations (Private) Limited - associated company Sales 2,571,070 2,121,342 Sales returned 45,436 5,440 Expenses claimed by IBL Operations (Private) Limited Carriage and duties 2,615 - Discounts 32,138 60,000 Sales promotion expenses 1,042 1,059 IT Services 52 - Expenses claimed by the Company Staff salaries and other expenses - 13,579 Royalty and price difference claims 7,119 10,379 (ii) International Brands Limited - holding company Expenses claimed by International Brands Limited Corporate service charges 18,000 18,000 Quarterly Report September

20 SELECTED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, /Sep/16 30/Sep/ (Rupees in 000) (iii) International Franchises (Private) Limited (IFL) - associated company Sales 9 - Rent, utility and other income 4,452 2,754 Purchase of Promotional Items - 41 Utilities expenses claimed from IFL 50 - (iv) United Distributors Pakistan Limited (UDPL) - associated company Expenses claimed by UDPL Warehouse rent & expenses (v) HABITT - associate Rent, utility and other income 17,639 13,715 Purchase of promotional Items from Habitt - 43 (vii) The Citizens Foundation - associate Donations - 10,000 (viii) Arshad Shahid Abdulla (Private) Limited - associated company Architect fee 1,795 4,337 (ix) Multinet Pakistan (Private) Limited - associated company Internet services 1, (x) MyCart (Private) Limited - associated company Purchases (xi) IBL Frontier Market (Private) Limited - associated company Sales

21 30/Sep/16 30/Jun/ (Rupees in 000) (xii) Summit Bank Limited - associated company Rent income 2,037 - Balances (i) Loans and advances - key management personnel At beginning of the period/year 2,415 7,004 Given during the period/year 130 2,617 Repaid during the period/year (798) (7,206) At the end of the period/year 1,747 2,415 (ii) Trade debts - associated company At beginning of the period/year 2,173,678 1,855,372 Addition during the period/year 2,315,347 8,412,078 Repaid during the period/year (2,027,908) (8,093,772) At the end of the period/year 2,461,117 2,173,678 (iii) Other receivables - associates At beginning of the period/year 39,687 40,920 Addition during the period/year 7,119 19,199 Repaid during the period/year - (20,432) At the end of the period/year 46,806 39,687 Quarterly Report September

22 SELECTED NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, DATE OF AUTHORIZATION FOR ISSUE This condensed interim consolidated financial information was authorized for issue on October 27, 2016, by the Board of Directors of the Company. 17 General In order to comply with the requirements of International Accounting Standard 34 - Interim Financial Reporting, corresponding figures in the condensed interim balance sheet comprise of balances as per the audited financial statements of the Company for the year ended June 30, 2016 and the corresponding figures in the condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows comprise of balances of comparable period as per the condensed interim financial consolidated information of the Company for the quarter ended September 30, Figures have been rounded-off to nearest thousand rupee. 22 Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director

23 Unconsolidated Financial Statements

24 DIRECTORS REPORT TO THE MEMBERS We are pleased to present the financial information of your Company for the three months ended September 30, These financial statements have been prepared in accordance with the requirements of the International Accounting Standard (IAS) 34 Interim Financial Reporting and the provisions of the directives issued under the Companies Ordinance, In case where requirements differ, the provision of directives issued under the Companies Ordinance, 1984 have been followed. OPERATING RESULTS September 30, (Rupees in thousand) Revenue 2,758,993 2,256,726 Gross profit 1,017, ,922 Operating expenses 695, ,735 Operating profit 322, ,187 Profit before taxation 828, ,880 Profit after taxation 740, ,032 Searle is continuously emerging stronger and is ready to embark on a new era as a resourcerich and fully integrated pharmaceutical company. Keeping the convention alive, the first quarter ended September 30, 2016 was yet again a phenomenal quarter for our stakeholders. Financial highlights are summarized below: Net sales of the Company amounted to Rs. 2, million, registering a growth of 22% over the corresponding period of last year. Gross profit margin showed a nominal dip of 1% as a result of overall market conditions and stood at 37% as compared with 38% of the corresponding period of the prior year. Operating expenses as percentage of sales decreased by 1% as a result of strict monitoring and control and stood at 25% as compared to 26% in the corresponding period of the last year. Operating profit, Profit before taxation and Profit after taxation of the company increased substantially by 19%, 40% and 45% respectively. The growth was driven by expanding doctor coverage, maturing product portfolio, higher volumes, richer product mix, branding efforts and strengthened demand. Further, tighter control over costs and expenses contributed their part in the improved financial performance of the company. 24

25 EARNINGS PER SHARE 12 Basic earnings per share after taxation were Rs (2015: Rs. 4.23). There is no dilution effect on the basic earnings per share of the Company, as the Company has no convertible dilutive potential ordinary shares outstanding as at September 30, FUTURE OUTLOOK The sum and substance of the existence of Searle, is based on the doctrine, service of mankind. We are functioning in full swing to make availability of adequate healthcare solutions certain, for the masses. Nationally and throughout the rapidly increasing cross border destinations, people rely on Searle, the new destination of possibilities, to help them get healthy throughout their lives. We expect to evolve as a company with an interesting mix of high value Bio Similar and complex branded generic products with emerging Nutritional range. We are persistently working for patients across the country and the respective markets, where we exist. Continuing our endeavors, we are developing Nutritional products and supplements and are trying to explore the possibilities for setting up a manufacturing facility in Europe and proceeding for USFDA approval for Bio Similar range. This evolution entails taking multiple initiatives, organic and inorganic, as well as higher risks. While not all these initiatives may give the desired results, we are gearing up the Company to maximize the odds of succeeding and minimize the disruption due to failure. Adding new Markets and launching high tech products with targeted improved productivity would fairly improve our profitability. In the long-term, Searle is targeting sustainable growth, faster than the market, both locally and internationally. Close focus on Bio Similar business will add significant high value to the patient s life along with more profits for the shareholders. ACKNOWLEDGEMENT We wish to thank the customers for their faith in our products, and their continuing patronage. We also take this opportunity to thank our suppliers, bankers and distributors for providing us with their valuable support throughout the period. Finally we wish to thank our staff who remained committed to deliver towards the growth of your Company. For and on behalf of the board Karachi October 27, 2016 Syed Nadeem Ahmed Chief Executive Officer Quarterly Report September

26 ر 2016 و 30 ا ا ڈا آ دى ڈا آرڈ ى ز ا د ں ا س ام ا د د ل ں ز ا ام ت ر اور ا رون ں ل ا د ت ا ز اور رو ا ادارہ ا ر ز د آ ے ا ر ا ا رت ا ر ر م ر ں ر رى ں ں ں ر اور دہ ر ر اور ر رپ ا و رى ر ا ت اور ار ا زت USFDA ر اور ا ا ا ت ان م ات ا ا ت اور اور ر ر ڈا راہ ا رف ت اور ں ر ر ا ن ا رى اوارى ا اف رے ت ل ار زا ر دو ں و ف ل ا ت زا ن د ز ں رو ر ں ا ر ا اس آں ا ت ر ا د اور ون ان ار ز م ا آ ادا ان ون ل ز اور ڈ ى ز ز ر ں ار ت ا م د رڈ ا ا آ ا 27 ا

27 ی ٹ ڈارئ رز یک روپرٹ رباےئ صصح ی ااگتفن س آپ وا ت ت ت ا ا ؤ ا رڈ ' Reporting (IAS-34) - 'Interim Financial اور آرڈ رى 1984 دہ ا ت ں ر ا رت ں ا ں آرڈ 1984 رى ا ت ں درآ آ (رو اروں ( 2,256,726 2,758,993 آ 854,922 1,017,830 آ ا ا ت 584, ,743 آ ت 270, , , ,635 از 510, ,060 از دا دور دوا ز اور و اور ا ر ا م ر ل ر روا 2016ء 30 وا ا رے : درج ذ ں ر ا رز زا 22 اس ت ل ر رو 2, اور 1 ح ر ل ر ر 37 ل اس ت 38 ر وا 1 ب ح ا ا ت آ و اور ول ل د آ ا ا ت ح 25 ر ل اس ت ح 26 آ ت از اور از اور 45 ح ا ا ا اڈ و رٹ وڈ ا ر ڈا ر ن ں اور ا م ا آں اور ا ا ت ول ار در ا دار ادا آ 6.14 رو از آ دى ( 2015 ء: 4.23 رو ) Quarterly Report September

28 CONDENSED INTERIM UNCONSOLIDATED BALANCE SHEET As at September 30, 2016 Un-audited Audited 30/Sep/16 30/Jun/16 ASSETS Note (Rupees in 000) Non-current assets Fixed assets - Property, plant and equipment 5 842, ,692 - Intangible assets 6 123,501 69, , ,577 Investment property 2,473,877 2,483,919 Long-term investment 7 2,837,484 2,636,202 Long-term loans Long-term deposits 1,598 1,598 Total non-current assets 6,279,231 6,000,647 Current assets Stores and spares 1,013 1,004 Stock-in-trade 1,179,329 1,166,583 Trade debts 8 3,097,257 2,577,971 Loans and advances 1,112, ,147 Trade deposits and short term prepayments 159, ,780 Other receivables 664, ,022 Advance Tax 472, ,456 Cash and bank balances 9 28,210 87,888 Total current assets 6,715,226 5,505,851 Total assets 12,994,457 11,506,498 EQUITY AND LIABILITIES Shareholders equity Authorized share capital 140,000,000 (June 2016: 140,000,000) ordinary shares of Rs. 10 each 1,400,000 1,400,000 Issued, subscribed and paid-up capital 10 1,227,523 1,227,523 -General reserve 280, ,251 -Share premium accoount 1,630,974 1,630,974 -Unappropriated profit 5,781,529 5,041,469 Total shareholders equity 8,920,277 8,180,217 Surplus on revaluation of fixed assets 296, ,961 Non-current liabilities Long term finances - secured 428, ,571 Deferred liabilities Taxation 37,604 37,604 Gratuity - unfunded 42,687 42,248 80,291 79,852 Total non-current liabilities 508, ,423 Current portion of long term finances 214, ,286 Short-term finances 348, ,577 Trade and other payables 2,673,923 1,819,328 Accrued mark-up 31,681 11,706 Total current liabilities 3,268,357 2,520,897 Total liabilities 3,777,219 3,029,320 Contingencies and commitments 11 Total equity and liabilities 12,994,457 11,506,498 The annexed selected notes from 1 to 18 form an integral part of this condensed interim financial information. 28 Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director

29 CONDENSED INTERIM UNCONSOLIDATED PROFIT AND LOSS ACCOUNT - UN-AUDITED For the period ended September 30, 2016 Quarter ended 30/Sep/ /Sep/2015 Note (Rupees in 000) NET SALES 2,758,993 2,256,726 COST OF SALES 1,741,163 1,401,804 GROSS PROFIT 1,017, ,922 Selling and distribution expenses 614, ,805 Administrative expenses 80,761 71, , ,735 OPERATING PROFIT 322, ,187 Other operating income 589, ,864 Other operating expenses 911, ,051 - Financial charges 25,594 40,293 - Other charges 57,334 51,878 82,928 92,171 PROFIT BEFORE INCOME TAX 828, ,880 Income tax expense 88,575 79,848 PROFIT FOR THE PERIOD 740, , (Rupees) EARNINGS PER SHARE - BASIC AND DILUTED The annexed selected notes from 1 to 18 form an integral part of this condensed interim financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director Quarterly Report September

30 CONDENSED INTERIM UNCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - UN-AUDITED For the period ended September 30, 2016 Quarter ended 30/Sep/ /Sep/ (Rupees in 000) PROFIT FOR THE PERIOD 740, ,032 Other comprehensive income Items that may be reclassified to profit and loss account subsequently Items that will not be subsequently reclassified to profit and loss account TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 740, ,032 The annexed selected notes from 1 to 18 form an integral part of this condensed interim financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director 30

31 UNCONSOLIDATED STATEMENT OF CASH FLOWS - UN-AUDITED For the period ended September 30, 2016 CASH FLOWS FROM OPERATING ACTIVITIES Quarter ended 30/Sep/ /Sep/2015 Note (Rupees in 000) Cash generated from operations after working capital changes , ,116 Gratuity paid (511) - Taxes paid (30,574) (297,110) Recovery of long-term loans Advance of short-term loans (342,486) (132,673) Net cash generated from operating activities 390, ,344 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipments (58,404) (32,957) Purchase of intangible assets (55,397) - Expenditures incurred on investment property (1,534) (7,232) Long-term investments 7 (201,282) (57,848) Proceeds from disposal of property, plant and equipment 6,307 3,245 (Expenses claimed) / Mark-up received from associated company - net (7,119) (15,269) Net cash used in investing activities (317,429) (110,061) CASH FLOWS FROM FINANCING ACTIVITIES Dividend paid (22) 13,494 Financial charges paid (5,619) (14,613) Net cash used in financing activities (5,641) (1,119) Net increase in cash and cash equivalents 67, ,164 Cash and cash equivalents at the beginning of the period (387,689) (559,513) Cash and cash equivalents at the end of the period 14 (320,257) (135,349) The annexed selected notes from 1 to 18 form an integral part of this condensed interim financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director Quarterly Report September

32 UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period ended September 30, 2016 Share capital Capital Reserve Reserve for bonus Revenue Reserve General reserve Total reserves Share premium account Unappropriated profit Share holders equity Rupees in Balance as at July 01, , , ,251-3,409,017 4,547,675 Total comprehensive income for the period , ,032 Balance as at September 30, , , ,251-3,919,049 5,057,707 Balance as at July 01, ,227, , ,251 1,630,974 5,041,469 8,180,217 Total comprehensive income for the period , ,060 Balance as at September 30, ,227, , ,251 1,630,974 5,781,529 8,920,277 The annexed selected notes from 1 to 18 form an integral part of this condensed interim financial information. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director 32

33 SELECTED NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, LEGAL STATUS AND OPERATIONS The Searle Company Limited (the Company) was incorporated in Pakistan as a private limited company in October In November 1993, the Company was converted into a public limited company. Its shares are quoted on the Pakistan Stock Exchange. The Company is principally engaged in the manufacture of pharmaceutical products and other consumer products. In addition, the Company is engaged in sale of food and consumer products, and manufacture of pharmaceutical products for other companies. The registered office of the Company is situated at First Floor, N.I.C. Building, Abbasi Shaheed Road, Karachi. International Brands Limited is the holding company, which holds 55.36% shareholding in the Company. The Company is the holding company of IBL HealthCare Limited and Nextar Pharma (Private) Limited due to significant representation in the board of directors of aforementioned companies having 74.19% and 70.34% shareholding respectively. The Company owns four wholly owned subsidiaries namely Searle Pharmaceuticals (Private) Limited, Searle Laboratories (Private) Limited, Searle Biosciences (Private) Limited and IBL Identity (Private) Limited (Formerly Al-Abid Exports (Private) Limited. 2 STATEMENT OF COMPLIANCE This condensed interim financial information of the Company for the period ended September 30, 2016 has 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, In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed. This un-audited condensed interim financial information constitutes separate condensed interim financial statements of the Company and are being presented and submitted to the shareholders as required by Listing Regulations of Pakistan Stock Exchange and under Section 245 of the Companies Ordinance, This condensed interim financial information do not include all information and disclosures required in the financial statements and should be read in conjunction with the financial statements of the Company for the year ended June 30, SIGNIFICANT ACCOUNTING INFORMATION AND POLICIES The accounting policies and method of computations adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of the financial statements for the year ended June 30, ACCOUNTING ESTIMATES AND JUDGEMENTS The estimates, judgments and associated assumptions used in the preparation of this condensed interim financial information are consistent with those applied in the preparation of the financial statements of the Company for the year ended June 30, Quarterly Report September

34 SELECTED NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, PROPERTY, PLANT AND EQUIPMENT 30/Sep/ /Jun/2016 Note (Rupees in 000) Operating fixed assets , ,373 Capital work in progress 27,319 27, , , Details of additions and disposals to operating assets during the period ended September 30, 2016 are as follows: Additions at cost Deletions at net book value Owned assets Building on Leasehold Land 3,080 - Plant and machinery 44,404 - Office and electrical equipments 10,281 (54) Air - conditioning Furniture & Fixture 85 - Vehicles - (5,385) September 30, ,404 (5,439) June 30, ,873 (2,375) 6 INTANGIBLE ASSETS 30/Sep/ /Jun/ (Rupees in 000) Operating intangible assets 25,677 27,459 Capital work in progress - at cost 97,824 42, ,501 69,885 7 LONG-TERM INVESTMENT Quoted subsidiary - at cost - IBL HealthCare Limited 1,300,911 1,300,911 Unquoted subsidiaries - at cost Searle Pharmaceuticals (Private) Limited Searle Laboratories (Private) Limited 125, ,000 Searle Biosciences (Private) Limited 10,000 10,000 IBL Identity (Private) Limited (Formerly Al-Abid Exports (Private) Limited) 49,875 49,875 Nextar Pharma (Private) Limited 600, , , ,553 Advance against issue of shares , ,738 2,837,484 2,636,202 34

35 7.1 This represents advance given to IBL Identity (Private) Limited (formerly Al-Abid Exports (Private) Limited) for further issue of shares. 30/Sep/ /Jun/ TRADE DEBTS Note (Rupees in 000) Considered good - Secured: Export debtors 109,747 56,211 - Unsecured: Due from: - associated companies 8.1 2,461,117 2,173,678 - subsidiary company - unsecured 114,401 1,820 - others 411, ,262 2,987,510 2,521,760 Considered doubtful - others Less: Provision for doubtful debts (622) (622) - - 3,097,257 2,577, The receivable is stated net of amounts payable aggregating Rs million (June 30, 2016: Rs million) on account of expenses claimed by the associated company. 9 CASH AND BANK BALANCES 30/Sep/ /Jun/ (Rupees in 000) Cash in hand 1,811 2,484 Cash with banks in: - deposit accounts current accounts 26,389 85,395 28,210 87,888 Quarterly Report September

36 SELECTED NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, ISSUED, SUBSCRIBED AND PAID-UP CAPITAL Ordinary shares of Rs. 10 each 30/Sep/ /Jun/ /Sep/ /Jun/ (Number of shares) (Rupees in 000) ,969,000 3,969,000 Fully paid in cash 39,690 39,690 Issued for consideration 24,000 24,000 other than cash ,175, ,175,190 Issued as fully bonus 1,101,752 1,101,752 share 8,584,074 8,584,074 Issued as fully right share 85,841 85, ,752, ,752,264 1,227,523 1,227, CONTINGENCIES AND COMMITMENTS There is no change in the contingencies and commitment since the last financial year ended June 30, 2016 except the following: 11.1 Contingencies The facility for opening letters of credit (LCs) acceptances and guarantees as at September 30, 2016 amounted to Rs. 1,255 million (June 30, 2016: Rs. 1,255 million) of which the amount remaining unutilized as at period end amounted to Rs. 744 million (June 30, 2016: Rs. 652 million) Commitments Future rentals payable against operating lease arrangement During the year ended June 30, 2010, the Company obtained factory building at Karachi on rent for a period of 5 years. The rent agreement was revised in December The Company has also entered into operating lease arrangements with Myplan Pharmaceuticals (Private) Limited and S.A.Pharma, a pharmaceutical concern, respectively, for a period of 20 years. Lease includes land and building located at Lahore and plant and machinery installed in leased building. The details of future rentals over lease period are as follows: 30/Sep/ /Jun/ (Rupees in 000) Not later than one year 21,625 22,683 Later than one year but not later than five years 102, ,944 Later than five years 218, , , ,424 36

37 12 EARNINGS PER SHARE - Basic and Diluted 30/Sep/ /Sep/ (Rupees in 000) Basic earnings per share Profit for the period (Rupees in thousands) 740, ,032 Weighted average number of shares in thousands 120, ,550 Earnings per share (Rupees) Diluted earning per share There is no dilution effect on the basic earning per share of the Company as the Company has no such commitments. 13 CASH GENERATED FROM OPERATIONS AFTER WORKING CAPITAL CHANGES 30/Sep/ /Sep/2015 Note (Rupees in 000) Profit before taxation 828, ,880 Adjustments for non-cash items and other items: Depreciation 30,780 24,825 Amortization of intangible assets 1,781 1,594 Gain on disposal of property, plant and equipment (868) (2,935) - net Provision for staff retirement gratuity Financial charges - net 25,594 40,293 Net increase in working capital 13.1 (122,833) 310, , , Working capital changes Current assets Increase in stores and spares (9) - (Increase)/decrease in stock-in-trade (12,746) 27,439 (Increase)/decrease in trade debts (519,286) 328,481 Increase in trade deposits and short term (28,653) (31,896) prepayments (Increase)/decrease in other receivables (416,755) 220,915 (977,449) 544,939 Current liabilities Increase/(decrease) in trade and other payables 854,616 (234,230) Net increase in working capital (122,833) 310,709 Quarterly Report September

38 SELECTED NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, CASH AND CASH EQUIVALENTS 30/Sep/ /Sep/ (Rupees in 000) Cash and bank balances 28,210 24,096 Short term finances (348,467) (159,445) (320,257) (135,349) 15 SEGMENT INFORMATION A segment is a distinguishable component of the Company that is engaged in business activities from which the Company earns revenues and incur expenses and its results are regularly reviewed by the Company s Chief Operating Decision Maker to make decision about resources to be allocated to the segment and assess its performance. Further, discrete financial information is available for each segment. Based on internal management reporting structure and products produced and sold, the Company is organised into the following three operating segments: - Pharmaceutical - Consumer - Investment property Management monitors the operating results of above mentioned segments separately for the purpose of making decisions about resources to be allocated and for assessing performance. Segment revenue, segment result, costs, assets and liabilities for the period are as follows: Pharmaceutical Consumer Investment Property Total 30/Sep/ /Sep/ /Sep/ /Sep/ /Sep/ /Sep/ /Sep/ /Sep/ (Rupees in 000) Segment revenue 2,386,172 1,886, , ,024 26,831 27,450 2,758,993 2,256,726 Segment result 230, ,693 97, ,404 (5,381) (7,910) 322, ,187 Unallocated income and expenses Other operating income 589, ,864 Finance cost (25,594) (40,293) Other charges (57,334) (51,878) Profit before taxation 828, ,880 Income tax expense (88,575) (79,848) Profit for the period 740, ,032 Depreciation 16,796 12,039 2,408 1,997 11,576 10,789 30,780 24,825 38

39 Pharmaceutical Consumer Investment Property Total Sep 30, 2016 Jun 30, 2016 Sep 30, 2016 Jun 30, 2016 Sep 30, 2016 Jun 30, 2016 Sep 30, 2016 Jun 30, (Rupees in 000) Segment assets and liabilities Segment assets 221, ,302 32,094 55,434 2,473,877 2,483,919 2,727,315 2,705,655 Unallocated assets 10,267,142 8,800,843 Total assets 12,994,457 11,506,498 Segment liabilities , , , ,857 Unallocated liabilities ,134,362 2,386,463 Total Liabilities 3,777,219 3,029,320 Additions in segment assets 51, ,380 7,324 50,812-77,559 58, ,751 Percentage for allocation 86.49% 83.58% 12.54% 15.20% 0.97% 1.22% % % 15.1 Geographical segments 30/Sep/ /Sep/2015 Note (Rupees in 000) Net sales by region Pakistan 2,501,367 2,006,789 South Asia 178, ,145 East Africa - 1,907 South East Asia 78, ,656 Middle East - 2, ,758,993 2,256,726 The geographical segment has been categorized using United Nation s composition of macro geographical (continental) regions The Company has presented the net sales amounts for the current and comparative prior period The Company s revenue from one of the major customer represents approximately Rs billion (September 30, 2015: Rs billion) of the total revenues. Quarterly Report September

40 SELECTED NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, Transactions 30/Sep/ /Sep/ (Rupees in 000) (i) IBL Operations (Private) Limited - associated company Sales 2,338,088 1,889,577 Sales returned 45,436 5,440 Expenses claimed by IBL Operations (Private) Limited Carriage and duties 2,615 - Discounts 32,138 60,000 Sales promotion expenses 1,042 1,059 IT Services 52 - Expenses claimed by the Company Staff salaries and other expenses - 13,579 Royalty and price difference claims 7,119 10,379 (ii) International Brands Limited - holding company Expenses claimed by International Brands Limited Corporate service charges 18,000 18,000 (iii) International Franchises (Private) Limited (IFL) - associated company Sales 9 - Rent, utility and other income 4,452 2,754 Purchase of Promotional Items - 41 Utilities expenses claimed from IFL 50 - (iv) United Distributors Pakistan Limited (UDPL) - associated company Expenses claimed by UDPL Warehouse rent & expenses

41 30/Sep/ /Sep/ (Rupees in 000) (v) HABITT - associate Rent, utility and other income 17,639 13,715 Purchase of promotional Items from Habitt - 43 (vi) IBL HealthCare Limited - subsidiary company Sales Expenses claimed by IBL HealthCare Limited Purchases of promotional items (vii) The Citizens Foundation - associate Donations - 10,000 (viii) Arshad Shahid Abdulla (Private) Limited - associated company Architect fee 1,795 4,337 (ix) Multinet Pakistan (Private) Limited - associated company Internet services 1, (x) MyCart (Private) Limited - associated company Purchases (xi) (xii) IBL Frontier Market (Private) Limited - associated company Sales Summit Bank Limited - associated company Rent income 2,037 - Quarterly Report September

42 SELECTED NOTES TO THE CONDENSED INTERIM UNCONSOLIDATED FINANCIAL INFORMATION For the period ended September 30, /Sep/ /Sep/ (Rupees in 000) (xiii) Searle Pharmaceuticals (Private) Limited - subsidiary company Purchases 634, ,739 Dividend income 488, ,000 (xiv) Searle Bio Sciences (Private) Limited - subsidiary company Sales 139,926 - Sales returned 28,010 - Dividend income 54,000 - Balances 30/Sep/ /Jun/ (Rupees in 000) (i) Loans and advances - key management personnel At beginning of the period/year 2,415 7,004 Given during the period/year 130 2,617 Repaid during the period/year (798) (7,206) At the end of the period/year 1,747 2,415 (ii) Trade debts - associated company At beginning of the period/year 2,173,678 1,855,372 Addition during the period/year 2,315,347 8,412,078 Repaid during the period/year (2,027,908) (8,093,772) At the end of the period/year 2,461,117 2,173,678 42

43 (iii) Other receivables - associates 30/Sep/ /Jun/ (Rupees in 000) At beginning of the period/year 39,687 40,920 Addition during the period/year 7,119 19,199 Repaid during the period/year - (20,432) At the end of the period/year 46,806 39,687 (v) Creditors - subsidiary company At beginning of the period/year 143, ,524 Addition during the period/year 634,923 2,092,806 Repaid during the period/year (625,194) (2,272,278) At the end of the period/year 152, , DATE OF AUTHORIZATION FOR ISSUE This condensed interim unconsolidated financial information was authorized for issue on October 27, 2016, by the Board of Directors of the Company. 18 General In order to comply with the requirements of International Accounting Standard 34 - Interim Financial Reporting, corresponding figures in the condensed interim balance sheet comprise of balances as per the audited financial statements of the Company for the year ended June 30, 2016 and the corresponding figures in the condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows comprise of balances of comparable period as per the condensed interim financial information of the Company for the quarter ended September 30, Figures have been rounded-off to nearest thousand rupee. Syed Nadeem Ahmed Chief Executive Officer Rashid Abdulla Director Quarterly Report September

44