| Sapphire Textile Mills Ltd - 2005 |
======================================================================================= BALANCE SHEET AS AT JUNE 30, 2005 ======================================================================================= Nine Months Year Ended Ended June 30, September 30, 2005 2004 Notes Rupees Rupees ======================================================================================= NON CURRENT ASSETS FIXED ASSETS: Property, plant and equipment 6 3,124,152,756 2,429,954,944 Capital work in progress 7 166,674,519 57,608,750 Intangible asset 8 3,519,539 - Long term investments 9 359,687,567 333,581,557 Long term loans and deposits 10 26,179,194 23,820,007 3,680,213,575 2,844,965,258 CURRENT ASSETS: Inventories 11 1,860,863,775 1,249,572,742 Trade debts 12 976,382,566 1,150,579,738 Loans and advances 13 31,165,687 107,861,213 Advance / refundable income tax 176,041,185 131,021,514 Trade deposits and short term prepayments 14 1,228,857 1,277,607 Other receivables 15 47,125,900 13,497,444 Short term investments 16 503,644,001 245,255,091 Cash and bank balances 17 41,256,301 56,528,131 3,637,708,272 2,955,593,480 Total assets 7,317,921,847 5,800,558,738 EQUITY AND LIABILITIES CAPITAL AND RESERVES: Share capital 18 200,831,400 200,831,400 Reserves 2,596,283,237 2,127,102,029 Shareholders' equity 2,797,114,637 2,327,933,429 NON CURRENT LIABILITIES: Long term finances 20 1,188,017,068 940,304,765 Customs duty payable 188,878 188,878 Deferred liabilities 21 326,710,352 279,462,992 1,514,916,298 1,219,956,635 CURRENT LIABILITIES: Trade and other payables 22 575,330,266 489,809,917 Interest / mark-up on loans 23 45,081,569 16,151,916 Short term borrowings 24 1,933,610,996 1,540,819,433 Current portion of long term liabilities 25 352,343,252 147,896,239 Provision for income tax 26 99,133,295 57,629,936 Unclaimed dividend 391,534 361,233 3,005,890,912 2,252,668,674 Contingencies and commitments 27 Total equity and liabilities 7,317,921,847 5,800,558,738 ======================================================================================= ======================================================================================= PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED JUNE 30, 2005 ======================================================================================= Nine Months Year Ended Ended June 30, September 30, 2005 2004 Notes Rupees Rupees ======================================================================================= Sales and services 28 5,338,810,168 7,461,055,757 Cost of sales and services 29 4,734,528,479 7,091,114,328 Gross profit 604,281,689 369,941,429 Distribution cost 30 (29,575,561) (27,986,950) Administrative expense 31 (49,747,754) (54,689,456) Other operating expenses 32 (20,088,074) (13,544,903) Other operating income 33 51,726,587 110,893,272 (47,684,802) 14,671,963 Profit from operations 556,596,887 384,613,392 Finance cost 34 (174,923,488) (127,260,241) Profit before taxation 381,673,399 257,353,151 Taxation 35 (92,900,325) (85,046,149) Profit after tax 288,773,074 172,307,002 Earnings per share - basic and diluted 36 14.38 8.58 ======================================================================================= ======================================================================================= CASH FLOW STATEMENT FOR THE PERIOD ENDED JUNE 30, 2005 ======================================================================================= Nine Months Year Ended Ended June 30, September 30, 2005 2004 Note Rupees Rupees ======================================================================================= CASH FLOWS FROM OPERATING ACTIVITIES: Cash generated from / (used in) operations 37 444,302,226 (168,394,983) Long term deposits received (8,941,889) 6,843,688 Long term loans and deposits (2,359,187) 3,181,989 Interest paid (146,992,274) (123,179,901) Gratuity paid (14,878,937) (34,616,947) Taxes paid (45,019,671) (52,731,495) (218,191,958) (200,502,666) Cash flows from / (used in) operating activities 226,110,268 (368,897,649) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (1,049,373,259) (265,827,748) Purchase of intangible (4,140,634) - Investment in associates (26,200,000) (44,350,000) Investment in others (73,419,026) (5,000,000) Encashment of held-to-maturity investments 7,774,000 11,560,000 Proceeds from disposal of fixed assets 48,815,932 15,381,500 Proceeds from sale of shares 21,618,502 - Dividend received from subsidiary - 80,750,000 Dividend received from associates 6,082,468 6,498,126 Dividend received from others 9,368,434 9,564,018 Interest received 1,267,837 922,296 Cash flows (used in) investing activities (1,058,205,746) (190,501,808) CASH FLOWS FROM FINANCING ACTIVITIES: Short term borrowings 393,047,277 246,722,367 Proceeds from long term loan 550,000,000 500,000,000 Repayment of redeemable capital and term finance (97,840,684) (124,649,607) Equity dividend paid (30,094,409) (30,126,631) 815,112,184 591,946,129 Net (decrease) / increase in cash and cash equivalents (16,983,294) 32,546,672 Net foreign exchange differences 18,245 53,148 Cash and cash equivalent at the beginning of the period 55,514,671 22,914,851 Cash and cash equivalent at the end of the period 38 38,549,622 55,514,671 ======================================================================================= =====================================================================================================================================================================================
STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED JUNE 30, 2005
=====================================================================================================================================================================================
Reserves
Capital Revenue Unrealised gain
Total Equity
Share Capital On available Total
Share Fixed assets General Unappropriated On hedging for sale
premium replacement profit instruments investments
Rupees
=====================================================================================================================================================================================
Balance as at September 30, 2003
as previously stated 200,831,400 156,202,200 65,000,000 330,000,000 1,255,648,429 4,639,044 104,720,793 1,916,210,466 2,117,041,866
Effect of change in accounting policy for dividend - - - - 30,124,710 - - 30,124,710 30,124,710
Balance as at September 30, 2003 as restated 200,831,400 156,202,200 65,000,000 330,000,000 1,285,773,139 4,639,044 104,720,793 1,946,335,176 2,147,166,576
Payment of dividend for the
year ended September 30, 2003 - - - - (30,124,710) - - (30,124,710) (30,124,710)
Profit for the year ended September 30, 2004 - - - - 172,307,002 - - 172,307,002 172,307,002
Unrealised gain on remeasurement
of available for investment - - - - - - 43,223,605 43,223,605 43,223,605
Realised gain on remeasurement of
forward foreign exchange contracts (4,639,044) (4,639,044) (4,639,044)
Balance as at September 30, 2004 200,831,400 156,202,200 65,000,000 330,000,000 1,427,955,431 - 147,944,398 2,127,102,029 2,327,933,429
Payment of dividend for the
year ended September 30, 2004 - - - - (30,124,710) - - (30,124,710) (30,124,710)
Profit for the period ended June 30, 2005 - - - - 288,773,074 - - 288,773,074 288,773,074
Unrealised gain on remeasurement
of available for investment - - - - - - 207,264,935 207,264,935 207,264,935
Unrealised gain on remeasurement
of forward foreign exchange - - - - - 3,267,909 - 3,267,909 3,267,909
Balance as at June 30, 2005 200,831,400 156,202,200 65,000,000 330,000,000 1,686,603,795 3,267,909 355,209,333 2,596,283,237 2,797,114,637
=====================================================================================================================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 20051. LEGAL STATUS AND NATURE OF BUSINESS Sapphire Textile Mills Limited (the company) was incorporated in Pakistan on March 11, 1969 as a public limited company under the Companies Act, 1913 (Now the Companies Ordinance, 1984). The shares of the company are listed on Karachi Stock Exchange. The registered office of the Company is located at 212 Cotton Exchange Building, Karachi and its mills are located at Kotri, Nooriabad, Chunian, Feroze Watwan, Bhai Pheru and Bhopattian Lahore. The Company is principally engaged in manufacturing and sale of yarn, fabrics and home textile products. 2. CHANGE IN FINANCIAL REPORTING PERIOD SRO 684 (1) 2004 dated August 10, 2004 issued by the Central Board of Revenue the Company's tax year / financial year is required to end on June 30, instead of September 30 and further Clarified by the Securities and Exchange Commission of Pakistan vide Circular No 29 of 2004 dated November 5, 2004. In order to make the company's accounting period consistent with the aforementioned requirement the company has prepared its financial statements covering period of nine months ended on June 30, 2005. Since the audited comparative figures are available for the year ended September 30, 2004 the same has been disclosed as comparative. The comparative figures of profit and loss account, cash flow statement and related notes are not comparable. 3. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984 (the Ordinance). Approved accounting standards comprise of such International Accounting Standards as notified under the provisions of the Ordinance. Wherever, the requirements of the Ordinance or directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards, the requirements of the Ordinance or the requirements of the said directives take precedence. 4. BASIS OF PREPARATION These financial statements have been prepared on historical cost convention except as disclosed in the accounting policies below. 5. SIGNIFICANT ACCOUNTING POLICIES 5.1. PROPERTY, PLANT AND EQUIPMENT Owned Property, plant and equipments are stated at cost less accumulated depreciation except land and capital work-in-progress which are stated at cost. Borrowing costs pertaining to erection / construction period of an asset are capitalised as part of historical cost. Depreciation on all other depreciable assets is charged by applying reducing balance method to write off cost over remaining useful life of the assets at the rates stated in relevant note. No depreciation is provided in the year of disposal / retirement, whereas, full year's depreciation is charged in the year of purchase / commercial operations except major additions or extensions to production facilities which are depreciated on prorata basis for the period of use during the year. Gain / loss on disposal of fixed assets is included in the income currently. Normal repairs and maintenance are charged to current income. Major repairs and replacements are capitalised and assets replaced, if not kept as stand by, are retired. Leased Finance leases, which transfers to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower at the present value of the minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the lease liability so as to achieve a constant rate of finance charge on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated on reducing balance method at the rates stated in relevant note. 5.2. CAPITAL WORK IN PROGRESS Capital work in progress is stated at cost and represents expenditure incurred on fixed assets in the course of construction and installation. Transfers are made to relevant fixed assets category as and when assets are available of use. 5.3. INTANGIBLE ASSET Intangible asset is stated at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is charged to income applying the straight line method at the rate indicated in note 8 to the financial statements. No amortisation is provided in the year of disposal / retirement, whereas, full year amortisation charged in the year of purchase. Maintenance is charged to income as and when incurred. Gain or loss on disposal is taken to the profit and loss account. The carrying value of intangible asset is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying value exceeds the estimated recoverable amount, the asset is written down to its recoverable amount. 5.4. INVESTMENTS All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment. All purchases and sales are recognised on trade dates. Investments of the Company are classified as follows: (a) Investment in associates The company's investments in associates are accounted for at cost. These are the entities in which the company has significant influence and which is neither a subsidiary nor a joint venture of the company. The investment in associates are carried in the balance sheet at cost, less provision for impairment in value, if any. (b) Investment in subsidiary Investment in subsidiary, in the holding company's financial statements is measure at cost. (c) Investment held for trading These are securities, which are either acquired for generating a profit from short-term fluctuations in market prices, interest rate movements, dealers' margin or are securities included in a portfolio in which a pattern of short-term profit making exists. (d) Investment held to maturity These are securities with fixed or determinable payments and fixed maturity for which the Company has the positive intent and ability to hold to maturity. (e) Investment available for sale These are investments, that do not fall under the 'held for trading' or 'held for maturity'. 5.5. LOANS, ADVANCES, DEPOSITS AND OTHER RECEIVABLES These are stated at cost. Provision is made for the amounts considered doubtful. Amounts considered irrecoverable are written off to profit and loss account. 5.6. STORES, SPARES AND LOOSE TOOLS These are valued at moving average cost except items in transit which are valued at cost accumulated to balance sheet date. 5.7. STOCK-IN-TRADE Stocks are valued at lower of cost and net realisable value. Costs incurred in bringing the materials to its present location and condition are accounted for as follows: Raw materials Purchase cost on average basis
Finished goods and work-in-process Cost of direct materials and proportion of
Manufacturing overheads
Wastes Realisable valueNet realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and the estimated costs necessary to make the sale.Items in transit are valued at cost accumulated to balance sheet date. 5.8. TRADE DEBTS Trade debts originated by the Company are recognised and carried at original invoice less an allowance for uncollectible amounts. An estimated provision for doubtful debt is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. 5.9. BANK BORROWINGS Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs, if any. Finance charges are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the periods in which they arise. 5.10. STAFF RETIREMENT BENEFITS Defined benefit plan (a) The company operates an un-funded gratuity scheme for its confirmed employees. The actuarial valuation was conducted at 30 June, 2005 based on the "Projected Unit Credit Method". (b) Employees' compensated absences The company makes provision for absences accumulated by its employees in accordance with International Accounting Standard - 19, "Employees Benefits (revised 2002)". 5.11. TRADE AND OTHER PAYABLES Trade and other payables are stated at their nominal value. 5.12. TAXATION Income tax expense represents the sum of current tax payable, adjustments, of any, to the provision for tax made in previous years arising from assessments framed during the year for such years and deferred tax. Deferred tax is provided using the liability method on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial statements reporting purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and tax credits can be utilised. Deferred tax assets and liability are measured at the tax rates that are expected to apply when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date. 5.13. DIVIDEND PAYABLE The Dividend declared is recognised as a liability in the period in which it is declared. Previously, dividend that were declared after the balance sheet date but before the financial statements were authorised for issue were reported as a liability, the change is made to conform with the revised Fourth Schedule to the Companies Ordinance, 1984. The changed accounting policy has been accounted for retrospectively, in accordance with benchmark treatment of International Accounting Standard "Net Profit or loss for the period, Fundamental errors and changes in accounting policy (IAS-8)". Had there been no change in the accounting policy the liability and unappropriated profit for the year ended September 30, 2003 would have been lower and higher by Rs 30,124,710. 5.14. PROVISIONS Provisions are recognised when the company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. 5.15. REVENUE RECOGNITION (a) Sale of goods Revenue from sale of goods is recognised when goods are dispatched to customers and invoices raised. (b) Interest / mark-up Interest / mark-up revenue is recognised as the interest / mark-up becomes due. (c) Dividends Revenue is recognised when the shareholders, right to received the payment is established. 5.16. GOVERNMENT GRANT These represent transfer of resources, from government, government agencies and similar bodies in return for the past or future compliances with certain conditions relating to the operation activities of the entity. The grants are disclosed as a deduction from the related expense. 5.17. BORROWING COST Borrowings costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are dealt with income in the period in which they are incurred. 5.18. FOREIGN CURRENCY TRANSLATIONS Transactions in foreign currencies are initially recorded at the rates of exchange ruling on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated into rupees at the exchange rates prevailing on the balance sheet date. In order to hedge its exposure to foreign exchange risks, the Company enters into forward exchange contracts. Such transactions are translated at contracted rates. All exchange differences are included in the income. 2.19. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise of cash at banks, cash in hand and short term deposits. For the purposes of cash flow statement cash and cash equivalents consist of cash and cash equivalents as defined above, net of temporary overdrawn bank balances. 5.20. IMPAIRMENT The company assesses at each balance sheet date whether there is any indication that a tangible fixed asset may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying value exceed recoverable amount, assets are written down to the recoverable amount. 5.21. FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised on the Company's balance sheet when the Company becomes a party to the contractual provisions of the instrument. 5.22. DERIVATIVE FINANCIAL INSTRUMENTS The company uses derivative financial instruments (primarily foreign currency forward contracts) to hedge its risks associated with foreign currency fluctuation relating to certain firm commitments. Such derivatives are initially recorded at cost, if any and are remeasured to fair value at subsequent date. Changes in the fair value of derivative financial instruments that are designated and effective as hedge of future cash flows relating to firm commitments are recognised directly in equity. Amount deferred in the equity is recognised in the profit and loss account in the same period in which the hedged firm commitment effects the net profit or loss. 5.23. RELATED PARTY TRANSACTIONS All transactions with related parties are carried out by the Company at arm's length price using the method prescribed under the Ordinance. 5.24. PRESENTATIONS Direct expenses incurred on sales have been deducted from sales for presentation in the profit and loss account as disclosed in note 28. It has no effect on the net profit for the year. 6. PROPERTY, PLANT AND EQUIPMENT ===================================================================================================================================================================================
COST ACCUMULATED DEPRECIATION
===================================================================================================================================================================================
As at As at Written Down
September 30, Addition Deletion As at June,30 September 30 Adjustment Expense for As at June 30, Value As at Rate
2004 2005 2004 the period 2005 June 30, 2005
Particulars Note
===================================================================================================================================================================================
Rupees %
LAND:
Freehold 6.1 85,452,198 44,259,031 (30,989,002) 98,722,227 - - - - 98,722,227 -
Leasehold 6,733,210 - - 6,733,210 - - - - 6,733,210 -
ON FREEHOLD LAND:
Factory building 382,981,597 61,066,141 - 444,047,738 148,448,906 - 22,169,912 170,618,818 273,428,920 10
Labour, staff colony and others 104,431,587 4,796,297 - 109,227,884 33,107,032 - 2,854,532 35,961,564 73,266,320 5
ON LEASEHOLD LAND:
Factory building 178,506,603 1,545,666 - 180,052,269 96,040,925 - 6,300,851 102,341,776 77,710,493 10
Labour, staff colony and others 51,145,517 4,193,046 - 55,338,563 24,837,985 - 1,143,772 25,981,757 29,356,806 5
Leased building improvements 8,964,789 - - 8,964,789 5,926,445 - 455,752 6,382,197 2,582,592 20
Plant and machinery 2,796,539,172 803,464,533 (15,083,898) 3,584,919,807 1,073,617,531 (10,309,296) 156,563,826 1,219,872,061 2,365,047,746 10
Electric installations 35,012,873 - (155,000) 34,857,873 12,737,391 (29,450) 1,661,245 14,369,186 20,488,687 10
Fire fighting equipments 90,915 - - 90,915 54,185 - 2,755 56,940 33,975 10
Electric equipments 4,998,558 - - 4,998,558 2,062,182 - 220,228 2,282,410 2,716,148 10
Office equipments 21,684,189 3,681,303 (32,000) 25,333,492 10,240,556 (6,080) 1,132,426 11,366,902 13,966,590 10
Mills equipments 24,802,157 2,488,085 - 27,290,242 11,623,742 - 1,174,987 12,798,729 14,491,513 10
Furniture and fixture 9,120,150 781,708 - 9,901,858 5,746,570 - 311,647 6,058,217 3,843,641 10
Vehicles 58,251,846 14,031,680 (3,295,507) 68,988,019 30,471,289 (2,257,423) 6,116,123 34,329,989 34,658,030 20
Plant and machinery - expired lease 384,564,869 - (1,267,655) 383,297,214 268,486,797 (909,632) 8,679,004 276,256,169 107,041,045 10
Vehicles - expired lease 1,040,990 - - 1,040,990 964,740 - 11,437 976,177 64,813 20
30 June, 2005 4,154,321,220 940,307,490 (50,823,062) 5,043,805,648 1,724,366,276 (13,511,881) 208,798,497 1,919,652,892 3,124,152,756
30 September, 2004 3,573,387,011 606,535,625 (25,601,416) 4,154,321,220 1,484,016,785 (258,333,685) 17,984,194 1,724,366,276 2,429,954,944
===================================================================================================================================================================================6.1. Cost of free hold land include Rs 714,768 (2004: Rs 762,401) which represent 50% of cost of land purchased jointly with an ex-associated company. The land is registered in joint names. 6.2. DEPRECIATION EXPENSES FOR THE PERIOD HAS BEEN ALLOCATED AS FOLLOWS =======================================================================================
Nine Months Year Ended
Ended June 30, September 30,
2005 2004
Notes Rupees Rupees
=======================================================================================
Cost of goods manufactured 29.1 207,954,156 256,652,366
Administrative expenses 31 844,341 1,681,319
208,798,497 258,333,685
=======================================================================================6.3. DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT (THROUGH NEGTIATION)==========================================================================================================================================================
Accumulated Net Book
Particulars Cost Depreciation Value Sale Proceeds Profit/(loss) Particulars of Buyers
Rupees
==========================================================================================================================================================
FREEHOLD LAND:
District Kasur - 332 Kanal 2 Marla 26,815,967 - 26,815,967 29,058,750 2,242,783 Amer Cotton Mills Limited
Manga Road - 2591 Marla 4,057,372 - 4,057,372 12,955,000 8,897,628 Amer Cotton Mills Limited
Jumber Khurd 3 Kanal 17 Marla 47,663 - 47,663 250,000 202,337 Amer Cotton Mills Limited
30,921,002 - 20,921,002 42,263,750 11,342,748
LEASEHOLD LAND:
Plot # D/13 SITE Kotri 68,000 - 68,000 200,000 132,000 Citizen Foundation
PLANT AND MACHINERY:
Autocoro machine 3,875,486 1,587,050 2,288,436 1,750,000 534,436
(538,436) Haji Mohammad Ismail Mills Ltd, Karachi
Draw frames 4,388,229 3,950,886 437,343 1,450,000 1,012,657 Time Textile Industry Karachi
2 DY -H-2 Toyoda 2,636,668 2,373,891 262,777 214,500 (48,277) Shahab Uddin Karachi
Two for one Twister 1,560,000 1,349,267 210,733 612,500 401,767 Sayed Ansari Kasur.
CVT - 4 1,863,515 972,202 891,313 214,500 (676,813) Latif Ahmed Hyderabad.
Sulzer Looms 760,000 76,000 684,000 245,652 (438,348) Amjad Ali Faisalabad
15,083,898 10,309,296 4,774,602 4,487,152 (287,450)
Plant and machinery - expired lease
Scutcher China 1,267,655 909,632 358,023 275,000 (83,023) Shahab Uddin Karachi
ELECTRIC INSTALLATION:
Computer UPS 155,000 29,450 125,550 101,000 (24,550) New Generation Technolgy 123-E-III Model Town
LAHORE
OFFICE EQUIPMENT:
Power supply 32,000 6,080 25,920 9,000 (16,920) New Generation Technology 123-E-III Model Town Lahore
VEHICLES:
Suzuki Mehran 373,057 220,253 152,804 200,000 47,196 Mr Nasir Hussain, Faisalabad.
Suzuki Mehran 305,000 - 305,000 285,000 (20,000) Adamjee Insurance Co.
Nissan Pickup 278,000 265,773 12,227 100,000 87,773 Mr Muhammad Ashraf S/o Din Mohammad
- House # 17-F-164 Orangabad # 2 Mirpur Khas.
Toyota Corolla 660,450 486,976 173,474 285,000 111,526 Mrs Kulsoom W/o Muhammad Arif Pioneer Cottage
House # A-17 Scheme 33 Gulshan-e-Iqbal Karachi.
Honda Civic 810,000 597,663 212,337 330,000 117,663 Mr Mustafa S/o Suleman Flate # 605 Al Mustafa
Apartment Jamshed Road Karachi.
Honda Civic 869,000 686,757 182,243 280,000 97,757 Sohail Azam Choudhry S/o Ch. Muhammad Azam
House # B-2/GOR-2 Lahore
3,295,507 2,257,422 1,038,085 1,480,000 441,915
50,823,062 13,511,880 37,311,182 48,815,902 11,504,720
==========================================================================================================================================================7. CAPITAL WORK-IN-PROGRESS=======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
Plant and machinery a/7.1!7.1 99,631,538 1,451,971
Buildings 48,255,379 33,208,509
Computer software development 1,396,000 4,151,334
Advance for purchase of land 14,687,102 14,847,436
Advance for purchase of motor vehicles 2,704,500 3,949,500
166,674,519 57,608,750
=======================================================================================7.1. It includes mark up on loans amounting to Rs Nil (2004: Rs 101,458) capitalised during the year.8. INTANGIBLE ASSET =============================================================================================================
Cost Amortisation
As at September As at As at Written down
Particulars 30, 2004 As at June 30 Rate September For the June 30, value as at June
Addition 2005 % 30, 2004 Period 2005 30, 2005
=============================================================================================================
Computer Software - 4,140,634 4,140,634 20 - 621,095 621,095 3,519,539
=============================================================================================================9. LONG TERM INVESTMENTS=======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
AT COST - IN RELATED PARTIES:
In subsidiary company 9.1 5,000,000 5,000,000
IN ASSOCIATES:
- Listed 9.2 36,939,567 36,939,567
- Unlisted 9.3 317,748,000 291,641,990
359,687,567 333,581,557
Other - held to maturity 9.4 - -
359,687,567 333,581,557
=======================================================================================9.1. INVESTMENT IN SUBSIDIARY COMPANY - UNLISTED============================================================================================
Number of Shares Cost
June September Name of Company June September
30,2005 30,2004 30, 2005 30, 2004
Rupees Rupees
============================================================================================
500,000 500,000 Sapphire Energy Limited 5,000,000 5,000,000
Equity Interest Held 100% (2004: 100%)
Break up value on the basis of unaudited
accounts for the year ended 30 June, 2005
Rs 856.31 (2004: Rs 724.05)
============================================================================================9.2. INVESTMENT IN ASSOCIATES - LISTED============================================================================================
Number of Shares Cost
June September Name of Company June September
30, 2005 30, 2004 30, 2005 30, 2004
Rupees Rupees
============================================================================================
2,975,311 2,975,311 Sapphire Fibres Limited 23,989,567 23,989,567
Equity interest held 17 % (2004: 17%)
1,295,000 1,295,000 Reliance Cotton Spinning Mills Limited- 12,950,000 12,950,000
Equity interest held 12.58% (2004: 12.58%)
36,939,567 36,939,567
Market value 266,262,258 266,653,947
============================================================================================9.3. INVESTMENT IN ASSOCIATES - UNLISTED============================================================================================
Number of Shares Cost
June September Name of Company June September
30, 2005 30, 2004 30, 2005 30, 2004
Rupees Rupees
============================================================================================
5,699,000 5,699,000 Diamond Fabrics Limited 48,315,000 48,315,000
Equity interest held 38.28% (2004:
38.28%)
Break up value on the basis of audited
accounts for the year ended 2004 Rs 49.67
- 9,399 Reliance Textile Limited - 93,990
Equity interest held Nil (2004: 19.03%)
Break up value on the basis of audited
accounts for the year ended June 30, 2005
Rs Nil (September 30, 2004: Rs 195.13)
1,550,000 1,550,000 Sapphire Power Generation Limited 19,748,000 19,748,000
Equity interest 16.54 % (2004: 16.54%)
Break up value on the basis of audited
accounts for the year ended 30 June, 2004:
Rs 64.37.
15,000,000 15,000,000 Sapphire Finishing Mills Limited 150,000,000 150,000,000
Equity interest held 37.45 % (2004: 37.45%)
Break up value on the basis of audited
accounts for the year ended
September 30, 2004 Rs 7.42
(September 30, 2003: Rs 10)
218,063,000 218,156,990
Deposit for shares 99,685,000 73,485,000
317,748,000 291,156,990
============================================================================================9.4. INVESTMENT - HELD TO MATURITY=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
US$ Nil (2004: US $130,000) Special US$ Bonds - 7,692,100
Bonds maturing within one year
shown under short term investments - 7,692,100
- -
=======================================================================================This represents investment in Special US dollar bonds for a period of three years and carries interest at the rate of LIBOR + 2%.10. LONG TERM LOANS AND DEPOSITS =======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
LOANS TO EMPLOYEES - UNSECURED
(CONSIDERED GOOD):
Executive 10.1 & 10.2 8,583,112 6,484,360
Other employees 23,624,580 22,250,892
32,207,692 28,735,252
Current portion of loans shown under current assets 9,000,803 7,879,550
23,206,889 20,855,702
Security deposits 2,972,305 2,964,305
26,179,194 23,820,007
=======================================================================================10.1. These interest free loans have been granted for various purposes and are recoverable in monthly instalments, which vary from case to case.Maximum amount due from executives during the period, calculated by reference to month-end balances, was Rs 10,490,890 (2004: Rs 6,576,860). 10.2. MOVEMENT IN LOANS TO EXECUTIVES =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Balance at beginning of the period 6,484,360 5,148,000
Amount disbursed during the period 4,754,520 3,403,360
11,238,880 8,551,360
Amount recovered during the period 2,655,768 2,067,000
Balance at end of the period 8,583,112 6,484,360
=======================================================================================11. INVENTORIES=======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Stores, spares and loose tools 11.1 98,989,150 102,125,329
Stock-in-trade 11.2 1,761,874,625 1,147,447,422
1,860,863,775 1,249,572,742
=======================================================================================11.1. STORES, SPARES AND LOOSE TOOLS=======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
Stores 35,743,779 26,044,089
Spares 11.3 58,056,861 72,618,604
Loose tools 228,340 127,313
In transit at cost 4,960,170 3,335,314
98,989,150 102,125,320
=======================================================================================11.2. STOCK-IN-TRADE=======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
RAW MATERIALS:
At mills 11.4 1,275,300,139 690,587,979
In transit 102,770,551 40,253,968
1,378,070,690 730,841,947
Work in process 81,701,307 92,666,653
FINISHED GOODS:
Manufactured products 285,720,805 305,425,147
Waste 16,381,823 18,513,675
302,102,628 323,938,822
1,761,874,625 1,147,447,422
=======================================================================================11.3. It includes spares amounting to Rs 2.026 million (2004: Rs Nil), which was written down by Rs 2.006 million (2004: Rs Nil) in order to bring it to net realisable value.The mark down is included in cost of sales under the head of stores and spares consumed. 11.4. It includes raw material amounting to Rs 17.399 million (2004: Rs 511.560 million), which was written down by Rs 6.378 million (2004: Rs 50.560 million) in order to bring it to net realisable value. The mark down is included in cost of sales under the head of raw material consumed. 12. TRADE DEBTS =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
UNSECURED - CONSIDERED GOOD:
Domestic debts 676,104,176 703,130,867
For waste 14,891,468 14,796,290
Others 2,850,907 2,312,450
693,846,551 720,239,607
SECURED - CONSIDERED GOOD:
Foreign debts - against direct export 282,536,015 430,340,131
976,382,566 1,150,579,738
=======================================================================================12.1. Trade debts include due from following associated undertakings of the company.=======================================================================================
June September
30, 2005 30, 2004
Rupees Rupees
=======================================================================================
Reliance Cotton Spinning Mills Limited 5,283 -
Sapphire Fibres Limited 2,402,661 4,609,418
Diamond Fabrics Limited 4,265,474 3,997,937
Sapphire Finishing Mills Limited 58,854,056 46,707,033
65,527,474 55,314,388
=======================================================================================13. LOANS AND ADVANCES=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Current portion of loans to employees 9,000,803 7,879,550
ADVANCES - UNSECURED (CONSIDERED GOOD):
To suppliers 21,065,769 99,020,620
To contractors 1,099,115 961,043
22,164,884 99,981,663
31,165,687 107,861,213
=======================================================================================14. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
DEPOSITS:
Security deposits 88,445 541,600
Excise / sales tax deposits 50,529 50,529
138,974 592,129
Prepaid expenses 1,089,883 685,478
1,228,857 1,277,607
=======================================================================================15. OTHER RECEIVABLES=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
UNREALISED GAIN ON REMEASUREMENT OF FORWARD FOREIGN:
currency contracts 3,267,909 -
Interest / mark up accrued 51,731 321,130
Dividend receivable 8,473,724 -
Insurance claim receivable 285,000 -
Sales tax receivable 19,617,009 4,942,266
Export rebate receivable 12,490,443 8,234,048
Government Grant - air freight 2,850,084 -
Others 90,000 -
47,125,900 13,497,444
=======================================================================================16. SHORT TERM INVESTMENTS=======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Held to maturity 9.4 - 7,692,100
Held for trading 16.1 10,124,384 4,502,213
Available for sale 16.2 493,519,617 233,060,778
503,644,001 245,255,091
=======================================================================================16.1. INVESTMENTS - HELD FOR TRADING==============================================================================================
Number of Shares Fair Value
==============================================================================================
June September Name of Company Cost June September
30, 2005 30, 2004 30, 2005 30, 2004
Rupees Rupees Rupees
==============================================================================================
54 54 Bankers' Equity Limited 759 - -
839 700 Atlas Investment Bank Limited 7,099 21,227 8,080
N.I.B. Bank Limited
19,209 14,747 N.D.L.C IFIC Bank) 249,026 441,807 269,133
461,500 500,000 ABAMCO Composite Fund 4,615,000 3,184,350 4,225,000
60,000 - National Bank of Pakistan 4,098,493 6,477,000 -
10,124,384 4,502,213
==============================================================================================16.2. INVESTMENTS - AVAILABLE FOR SALE====================================================================================================
Number of Shares Fair Value
June September Name of Company Cost June September
30, 2005 30, 2004 30, 2005 30, 2004
Rupees Rupees Rupees
====================================================================================================
MCB Bank Limited (Formerly
5,662,736 4,476,475 Muslim Commercial Bank Limited) 86,140,410 449,054,965 223,376,103
553,410 553,410 Gulshan Spinning Mills Limited 17,441,370 9,961,380 9,684,675
Oil and Gas Development Company
50,000 - Limited 6,592,691 5,265,000 -
79,350 - Fauji Fertilizer Company Ltd 9,547,940 9,629,122 -
90,000 - The Bank of Punjab Limited 7,286,528 7,537,500 -
8,500 - Pakistan State Oil Limited 2,727,145 3,281,000 -
50,000 - Sui Southern Gas Company Ltd 1,446,184 1,157,500 -
791,000 - Pakistan Strategic Allocation Fund 7,128,017 7,633,150 -
493,519,617 233,060,778
====================================================================================================17. CASH AND BANK BALANCES=======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Cash in hand 3,824,402 7,986,635
CASH AT BANKS:
in current accounts 32,932,162 29,040,913
in saving accounts - foreign currency 17.1 2,305,742 2,184,884
in deposit accounts 17.2 1,903,876 17,025,580
in margin accounts 290,119 290,119
37,431,899 48,541,496
41,256,301 56,528,131
=======================================================================================17.1. This represents US$ account having a balance of US$ 38,971 (2004: US$ 36,924).17.2. Cash at bank on deposit account of Rs 1,903,876 (2004: Rs 17,025,580) and cash in margin account of Rs 290,119 (2004: Rs 290,119) were under lien of banks / financial institutions against guarantees issued on behalf of the Company. 18. SHARE CAPITAL ===========================================================================================
June September June September
30, 2005 30, 2004 30, 2005 30, 2004
Number of shares Rupees Rupees
===========================================================================================
AUTHORISED
35,000,000 35,000,000 Ordinary shares of Rs 10 each
350,000,000 350,000,000
ISSUED, SUBSCRIBED AND PAID-UP:
6,206,740 6,206,740 Ordinary shares of
Rs 10 each fully paid in
cash 62,067,400 62,067,400
13,876,400 13,876,400 Ordinary shares of
Rs 10 each issued as
fully paid bonus shares 138,764,000 138,764,000
20,083,140 20,083,140 200,831,400 200,831,400
===========================================================================================18.1. The company has only one class of shares which carry no right to fixed income18.2 4,541,769 (2004: 4,327,051) shares of the Company are held by associated companies as at balance sheet date. 19. REDEEMABLE CAPITAL =======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
Term finance 19.1 - 8,333,337
Current portion shown under current liabilities - 8,333,337
- -
=======================================================================================19.1. The company has entered into an agreement with HSBC for sale and repurchase of its assets (Toyoda Ring Spinning Frame, Back Process Machinery, Siplex Frame and Murata Mach Connor with all standardised accessories) located at its Unit 5 - Feroze Watwan.In terms of the agreement, the Company has agreed to sell the said assets to the banking company at a price of Rs 100,000,000 and to repurchase it simultaneously from the banking company at a price of Rs 125,000,000. The loan originally carries mark up to be calculated at the end of each calendar quarter end as the simple average of the cut-off rates of the 6 months Treasury Bill (T-Bills) auctions by the State Bank of Pakistan over the preceding 3 months plus 2.5 percent subject to a floor rate of 11 percent with ceiling of 17 percent per annum. Subsequently the bank has reduced mark up rate to simple average of the cut-off rate of the 6 months T-Bills auction by the State Bank of Pakistan over the preceding 3 months + 2.5% with a floor of 4.5% with effect from July 25, 2003. If T-Bills are discontinued, the mark up will be based on the alternate government security of similar risk and / or tenor. The loan is repayable in 12 quarterly instalments commencing from 31 March, 2002. The loan is secured against a registered first charge of Rs 125 million over the plant and machinery located at Unit 5, by way of hypothecation in form and substance acceptable to the banking company and a demand promissory note for the full amount of the purchase price. The loan has been fully paid during the period under review. 20. LONG TERM FINANCES =======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
SECURED - FROM BANKING COMPANIES:
United Bank Limited 20.1 - 21,594,650
Standard Chartered Bank 20.2 42,857,144 71,428,572
Union Bank Limited 20.3 35,000,000 42,000,000
Standard Chartered Bank 20.4 35,714,286 50,000,000
Standard Chartered Bank 20.5 37,500,000 50,000,000
United Bank Limited 20.6 300,000,000 300,000,000
Habib Bank Limited 20.7 38,888,890 44,444,445
National Bank of Pakistan Limited 20.8 250,000,000 250,000,000
United Bank Limited 20.9 250,000,000 250,000,000
United Bank Limited 20.10 150,000,000 -
National Bank of Pakistan Limited 20.11 400,000,000 -
1,539,960,320 1,079,467,667
Less: current portion shown
under current liabilities 352,343,252 139,562,902
1,187,617,068 939,904,765
Unsecured - from associated person 20.12 400,000 400,000
1,188,017,068 940,304,765
=======================================================================================20.1. UNITED BANK LIMITEDThe loan has been obtained from United Bank Limited to retire the documents under letter of credits established for import of plant and machinery. The loan shall be repaid in 9 semi-annual instalments, the first payment commencing 12 months after the first draw down i.e. October, 1999. The loan has been fully repaid. The loan carries interest at the rate equal to the "Base Rate" as defined below plus 2.0% per annum. Mark up shall be payable quarterly in arrears on designated mark up payment dates. The first mark up payment date will fall due 3 months after first drawdown. Subsequent mark up payments will be made with intervals of 3 months each until the time that the facility is retired. The "Base Rate" will be the simple average of the weighted average yied prevailingin each of the last three "six-months Treasury Bill" auction immediately preceding the Base Rate fixing date. The base rate will be fixed on the first draw down i.e. October 1999 and will be re-priced quarterly. The loan is secured against exclusive 1st charge over the fixed assets related to the expansion with a margin of 25% including land and building. The value of charge amounts to Rs 268 million. 20.2. STANDARD CHARTERED BANK The Company has arranged term loan amounting Rs 100 million from Standard Chartered Bank to finance Balancing, Modernisation and Replacement (BMR) and expansion. The term loan carried mark up at the rate of last six months T bills cut off plus 1.8% per annum payable quarterly in arrears. The term loan is repayable in seven equal semi-annual instalments commencing twenty four months from draw down i.e. November 6, 2001. The loan is secured against hypothecation charge over company's plant and machinery installed or to be installed at Unit No 5 factory premises situated at Feroze Watwan. The company has the option to prepay the outstanding liability at any point of time after one year, with there months notice period. 20.3. UNION BANK LIMITED The company has arranged term loan amounting Rs 70 million from Union Bank Limited. The term loan carried mark up rate at average cut-off yield of 6 months Treasury Bills for three auctions plus 3% payable quarterly in arrears. The bank has reduced mark up rate at average cut-off yield of 6 months Treasury Bills for last three auctions plus 1.5% The term loan is repayable in ten equal half yearly instalments commencing six months after the first draw down i.e. July 24, 2002. The term loan is secured against exclusive charge over specific machinery. 20.4. STANDARD CHARTERED BANK The company has arranged a term loan amounting to Rs 50 million from Standard Chartered Bank. The term loan carried mark up at the rate of last six months T. Bills cut off plus 1.8% per annum and is payable quarterly in arrears. The term loan is repayable in seven equal semi annual instalments commencing twenty four months from the draw down date i.e. October 23, 2002. The term loan is secured against hypothecation of plant and machinery installed or to be installed at Unit No 5 of the company situated at Feroze Watwan. 20.5. STANDARD CHARTERED BANK The company has arranged term loan from Standard Chartered Bank amounting to Rs 50 million to finance balancing, modernisation and replacement project and for any other purpose that may be mutually agreed between the company and the bank. The term loan carries mark up at the rate of last six months T bill cut off plus 1.5% per annum and is payable quarterly. The term loan is repayable in eight equal semi annual instalments commencing eighteen months from the draw down date i.e. June 4, 2003. The term loan is secured against hypothecation of plant and machinery installed or to be installed at Unit No 5 of the company situated at Feroze Watwan. 20.6. UNITED BANK LIMITED The Company has arranged term finance amounting to Rs 300 million to finance capital expenditure balancing modernisation and refurbishment. The term finance carries mark up at the rate equal to the "Base rate" as defined below plus 1.50% per annum provided however the applicable rate shall not be less than 3.8% and shall not exceed 9.6% per annum payable half yearly. Base Rate shall mean: (i) for the first mark up payment, the cut off yield of the last auction of the six month Government of Pakistan Treasury Bills held immediately prior to the draw down date. (ii) for each subsequent mark up payment, the cut off yield of the most auction of six months Government of Pakistan Treasury Bills prevailing two days prior to the commencement of each of the month period immediately preceding the mark up payment date. The term finance is repayable in eight half yearly commencing from 29 March, 2005. The term finance is secured against exclusive first charge by way of hypothecation over all present and future asset of Unit No 6 of the company situated at Feroze Watwan or in the course of transit shipment or delivery to or from the said unit with all the benefits of or all rights relating thereto. 20.7. HABIB BANK LIMITED The company has arranged term loan amounting to Rs 50 million of BMR and expansion of Unit No 3 of the company. The term loan carries mark up at the rate equal to the Base Rate as defined below plus 1.5% per annum payable quarterly. "Base Rate" shall mean the simple average of cut off yield of the last three successful auctions of six months treasury bills held by the State Bank of Pakistan. The base rate shall be set two days prior to the beginning of each base period for the instalment of purchase price due at the end of that base period as defined below. "Base Period" shall mean the period starting on the date of disbursement of the sale price and ending three months thereafter and subsequent period of three months. The term loan is repayable in nine equal semi annual instalments commencing from 2 August, 2004. The term loan is secured against mortgage by way of deposit of title deed of all leasehold rights in piece and parcel of land bearing industrial plot No A/84 situated at Industrial Estate Area, Nooriabad and a demand promissory note for the marked up price. 20.8. NATIONAL BANK OF PAKISTAN LIMITED The company has availed term loan to finance permanent portion of working capital requirements of the company. It carries mark up at the rate of 3.75% in first year (from 30 October, 2003 to 20 September, 2004), 4.5% in second year (from 21 September, 2004 to 10 August, 2005) and 5.25% in the third year (from 11 August, 2005 to 31 August, 2006) per annum. Mark up will be paid quarterly basis. It is secured by way of first pari passu charge on current assets of unit No 4 of Sapphire Textile Mills Limited to the extent of Rs 90 million and on fixed assets of the unit No 4 amounting to Rs 244 million. It will be repaid in five equal monthly instalment of Rs 50 million each commencing from April 30, 2006. 20.9. UNITED BANK LIMITED The company has availed term finance loan to finance permanent portion of working capital requirements of the company. It carries mark up at the rate of 6 months T-Bill cut-off yield + 100 bps to be determined as at start of mark payment period. It is secured against first pari passu charge by way of hypothecation over fixed assets of Unit No 2 of the company amounting to Rs 333.33 million. It will be available for the period of three years. On maturity in October, 2006 it will be paid through bullet repayment. 20.10. UNITED BANK LIMITED The company has arranged term loan amounting Rs 150 Million from united bank limited to retire the documents under letter of credit established for regular BMR of the company. The loan shall be repaid in sixteen quarterly equal instalments. The first payment commencing fifteen months after the first drawdown. The loan carries mark up equal at the rate of three month KIBOR plus 1% p.a. payable quarterly. The KIBOR to be taken on the day preceding each quarterly mark up date. It is secured by way of firs pari passu hypothecation charge of Rs 200 Million over fixed assets of Unit No 6 (Present and future plant and machinery) of the company. The registered charge should be sufficient to cover the entire facility with a margin of 25%. 20.11. NATIONAL BANK OF PAKISTAN LIMITED The company has availed term loan to finance the procurement of plant and machinery, to meet the capital expansion requirement of the company. It carries mark up at the rate equal to "Base rate" as defined below plus 70 bps paid on semi annual bases. "Base rate" is defined as the average rate of the six month Karachi inter bank offer rate (KIBOR). The base rate will be set for the first time on the first drawn-down date and then on immediately day before the start of each six months. The term loan is repayable in seven equal semi annual instalments commencing from 24th month from the date of first draw down. The term loan is secured against hypothecation of plant and machinery installed or to be installed at unit No 5 of the company. 20.12. RELATED PARTY Associated persons This represents unsecured interest free loan from related party. Terms of repayment have not been settled but are repayable after more than one year. 21. DEFERRED LIABILITIES =======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Staff retirement benefit - gratuity 21.1 89,829,359 85,037,076
Deferred tax 21.6 226,163,993 174,767,027
Long term deposits 21.7 10,717,000 19,658,889
326,710,352 279,462,992
=======================================================================================21.1. STAFF RETIREMENT BENEFIT - GRATUITY=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Balance at the beginning of the period 85,037,076 96,872,082
Provision made during the period 21.4 19,671,220 22,781,941
104,708,296 119,654,023
Payments made during the period 14,878,937 34,616,947
Balance at end of the period 89,829,359 85,037,076
=======================================================================================21.2. The amount included in the balance sheet arising from the company's obligation in respect of its defined benefit retirement plan is as follows:=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Present value of defined benefit obligation 90,673,178 82,824,441
Unrecognised actuarial (loss) / gain (843,819) 2,212,635
89,829,359 85,037,076
=======================================================================================21.3. PRINCIPAL ACTUARIAL ASSUMPTIONS AT THE BALANCE SHEET DATE FOR=======================================================================================
June September
30,2005 30,2004
=======================================================================================
Discount rate 9% 8%
Expected rate of salary increase in future 8% 7%
=======================================================================================21.4. THE AMOUNT CHARGED TO PROFIT AND LOSS ACCOUNT IS AS FOLLOWS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Current service cost 14,703,504 15,240,241
Interest cost 4,967,716 7,541,700
19,671,220 22,781,941
=======================================================================================21.5. THE GRATUITY EXPENSE HAS BEEN ALLOCATED AS FOLLOWS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Cost of goods manufactured 14,035,887 15,783,633
Administrative expenses 4,526,538 5,727,384
Selling expenses 1,108,795 1,270,924
19,671,220 22,781,941
=======================================================================================21.6. DEFERRED TAX=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Accelerated tax depreciation allowances 239,019,922 187,734,756
Provision for gratuity (12,855,929) (12,967,729)
226,163,993 174,767,027
=======================================================================================Deferred tax has been calculated on sales ratio.21.7. The company has received deposits from its selling agents / customers which are not refundable during the subsistence of selling agency. In accordance with the arrangements with the selling agents these are interest free and can be used in the business of the company. 22. TRADE AND OTHER PAYABLES =======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Creditors 22.1 70,767,208 63,820,081
Accrued expenses 22.2 123,811,213 119,692,327
Excise duty payable on loans and leases 316,236,517 257,079,103
Withholding tax payable 9,177,249 9,177,249
Customs duty payable 338,837 2,000
Other liabilities 22.3 6,787,171 2,747,886
Workers' Profit Participation Fund payable 22.4 20,088,074 13,544,903
Workers' Welfare Fund Payable 1,122,781 1,122,781
Sindh Development and Maintenance
Infrastructure Fee Payable 22.5 23,739,148 19,361,519
575,330,266 489,809,917
=======================================================================================22.1. Creditors include Rs 15,588,957 (2004: Rs 5,718,494) payable to associated undertakings.22.2. Accrued expenses include Rs 13,198,163 (2004: Rs 17,850,318) payable to associated undertakings. 22.3. Other liabilities include Rs 1,040,000 (2004: Rs 862,500) payable to associated undertaking for machinery. 22.4. WORKERS' PROFIT PARTICIPATION FUND =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Balance at beginning of the period 13,544,903 15,922,604
Interest credited during the period 780,688 745,963
14,325,591 16,668,567
Payments made during the period 14,325,591 16,668,567
- -
Provision for the period 20,088,074 13,544,903
Balance at end of the period 20,088,074 13,544,903
=======================================================================================22.5. The company has filed a suit against levy of Infrastructure fee. The matter is still pending.However, the company has decided to provide the liability till the matter is decided. 23. INTEREST / MARK UP ON LOANS =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Redeemable capital - 191,947
Long term loans 27,199,751 7,751,416
Short term loans 17,881,818 8,208,553
45,081,569 16,151,916
=======================================================================================24. SHORT TERM BORROWINS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
SECURED - FROM BANKING COMPANIES:
Short term loan 1,220,000,000 690,000,000
Running / cash finance under mark up arrangements 710,904,317 849,805,973
1,930,904,317 1,539,805,973
UNSECURED:
Temporary overdrawn balances 2,706,679 1,077,053
1,933,610,996 1,540,819,433
=======================================================================================Aggregate facilities amounting to Rs 5,105 million (2004: Rs 5,185 million) were available to the company from banking companies.These are secured against hypothecation of stocks / mortgage of fixed assets and export bills under collection. These carry mark up ranging from 7 to 26 paisa (2004: 5 to 16 paisas) per thousand per day, payable quarterly. These facilities are renewable on expiry dates. It includes Rs Nil (2004: Rs 58,058,665) on account of foreign currency loan translated into local currency at exchange rate prevailing on the balance sheet date and are payable in foreign currencies. 25. CURRENT PORTION OF LONG TERM LIABILITIES =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Redeemable capital - 8,333,337
Long term finances 352,343,252 147,896,239
=======================================================================================26. PROVISION FOR INCOME TAX=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Opening balance 57,629,936 41,868,406
Add: provision made for current period / year 41,503,359 57,629,936
LESS: ADVANCE TAX ADJUSTED DURING THE YEAR:
against completed assessments - (41,868,406)
99,133,295 57,629,936
=======================================================================================26.1. RELATIONSHIP BETWEEN TAX EXPENSE AND ACCOUNTING PROFIT=======================================================================================
June September
30, 2005 30, 2004
% %
=======================================================================================
Applicable tax rate 35.00 35.00
TAX EFFECT OF EXPENSES THAT ARE ADMISSIBLE / INADMISSIBLE:
in determining taxable profit (40.86) (21.26)
Effect of difference in tax rates under normal tax regime
and presumptive tax regime 20.40 10.94
Effect of income exempt for tax purpose (3.66) (2.29)
Effect of adjustment in respect of deferred taxation 13.47 10.65
Average tax rate charged to profit and loss account 24.35 33.04
=======================================================================================27. CONTINGENCY AND COMMITMENTS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
CONTINGENCY:
Guarantees issued by banks on behalf of the Company 53,812,250 45,812,250
COMMITMENTS
CONFIRMED LETTER OF CREDIT IN RESPECT OF:
Stores, spares and loose tools 8,451,650 7,142,808
Stock-in-trade 64,497,808 69,430,591
Plant and machinery 137,209,642 316,746,250
210,159,100 393,319,649
=======================================================================================28. SALES AND SERVICES=====================================================================================================================================
Export Sales Local Sales Total
Nine Months Year Ended Nine Months Year Ended Nine Months Year Ended
Ended June 30, September 30, Ended June 30 , September 30, Ended June 30, September 30,
2005 2004 2005 2004 2005 2004
Notes Rupees
=====================================================================================================================================
GROSS SALE OF GOODS:
Yarn 28.1 2,277,708,595 3,210,738,229 1,828,146,970 2,802,692,191 4,105,855,565 6,013,430,420
Fabric 28.2 562,171,673 901,055,740 357,507,217 443,839,267 919,678,890 1,344,895,007
Home textile products 404,842,549 212,525,994 204,363 217,849 405,046,912 212,743,843
Waste 74,271,500 115,884,420 55,296,560 93,407,801 129,568,060 209,292,221
3,318,994,317 4,440,204,383 2,241,155,110 3,340,157,108 5,560,149,427 7,780,361,491
DIRECT EXPENSES:
Commission 45,917,869 84,123,757 45,568,683 71,617,402 91,486,552 155,741,159
Export development surcharge 7,748,231 10,901,228 - - 7,748,231 10,901,228
Insurance 482,988 337,080 - - 482,988 337,080
Freight and handling 28.3 128,077,380 142,177,257 20,116,589 21,163,530 148,193,969 163,340,787
Quota purchase - 5,184,082 - - - 5,184,082
182,226,468 242,723,404 65,685,272 92,780,932 247,911,740 335,504,336
Net sale 3,316,767,849 4,197,480,979 2,175,469,838 3,247,376,176 5,312,237,687 7,444,857,155
Export rebate 18,841,744 12,369,523
Processing income 7,730,737 3,829,079
5,338,810,168 7,461,055,757
=====================================================================================================================================28.1. EXPORT SALES - YARN=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Direct 2,277,708,595 3,192,443,629
Indirect - 18,294,600
2,277,708,595 3,210,738,229
=======================================================================================28.2. EXPORT SALES - FABRICS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Direct 555,268,784 866,544,962
Indirect 6,902,889 34,510,778
562,171,673 901,055,740
=======================================================================================28.3. The amount excludes government grants received of Rs 2,850,084 (2004: Rs Nil) as air freight subsidy.28.4. Total sales excludes sales tax amounting to Rs 295,313,994 (2004: Rs 496,402,881). 29. COST OF SALES AND SERVICES =======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
Opening stock of finished goods 323,938,822 265,685,121
Cost of goods manufactured 29.1 4,608,318,602 7,102,201,701
4,932,257,424 7,367,886,822
FINISHED GOODS PURCHASED:
Yarn - 19,793,015
Fabrics 23,989,761 27,373,313
23,989,761 47,166,328
4,956,247,185 7,415,053,150
Closing stock of finished goods 221,718,706 323,938,822
4,734,528,479 7,091,114,328
=======================================================================================29.1. COST OF GOODS MANUFACTURED=======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Raw materials consumed 29.2 3,116,508,233 5,442,797,220
Salaries, wages and benefits 29.3 330,093,973 361,606,968
Stores and spares consumed 287,485,376 320,910,673
Fuel, power and water 426,581,155 544,345,807
Insurance 20,300,455 16,158,656
Rent rates and taxes 481,451 419,381
Repairs and maintenance 10,840,939 9,009,999
Depreciation 6.2 207,954,156 256,652,366
Postage, telephone and telex 3,853,718 4,309,095
Vehicle running expenses 6,247,938 7,075,137
Travelling and conveyance 7,576,339 9,885,635
Printing and stationary 1,252,997 1,119,823
Fees and subscription 1,091,773 1,323,316
Other manufacturing expenses 29.4 165,280,015 150,215,804
Legal and professional charges 107,000 550,950
Other expenses 11,697,738 5,275,959
4,597,353,256 7,131,656,789
WORK IN PROCESS INVENTORIES:
Opening stock 92,666,653 63,211,565
Closing stock 81,701,307 92,666,653
10,965,346 (29,455,088)
4,608,318,602 7,102,201,701
=======================================================================================29.2. RAW MATERIALS CONSUMED=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Opening stock of raw materials 690,587,979 390,144,086
Purchase - net 3,773,938,336 5,743,241,113
4,464,526,315 6,133,385,199
Closing stock of raw materials 1,348,018,082 690,587,979
3,116,508,233 5,442,797,220
=======================================================================================29.3. Salaries, wages and benefits include Rs 14,035,887 (2004: Rs 15,783,633) in respect of post employment benefit (gratuity).29.4. OTHER MANUFACTURING CHARGES =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Cotton dyeing and bleaching charges 77,715,725 93,267,701
Yarn dyeing and bleaching charges 24,270,752 23,194,206
Fabric dyeing, bleaching and knitting charges 44,712,003 21,282,938
Yarn doubling charges 4,213,976 1,674,854
Warping and sizing charges 606,966 725,946
Stitching and other charges 13,760,593 10,070,159
165,280,015 150,215,804
=======================================================================================30. DISTRIBUTION COST=======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
Salaries and benefits 30.1 7,715,944 8,458,786
Rent and utilities 436,965 444,883
Postage, telegram and telephone 5,079,302 5,208,102
Travelling, conveyance and entertainment 3,627,892 2,155,376
Repairs and maintenance 207,529 76,148
Fees and subscription 6,880 431,168
Sample / Advertisements 12,123,247 9,489,403
Printing and stationary 377,802 1,723,084
29,575,561 27,986,950
=======================================================================================30.1. Salaries and benefits include Rs 1,108,795 (2004: Rs 1,270,924) in respect of post employment benefits (gratuity).31. ADMINISTRATIVE EXPENSES =======================================================================================
June September
30,2005 30,2004
Notes Rupees Rupees
=======================================================================================
Directors' remuneration 2,259,900 3,013,200
Salaries and benefits 31.1 24,748,845 28,645,056
Rent, rates and utilities 1,079,408 1,473,141
Postage, telephone and telex 1,659,313 1,996,462
Printing and stationery 1,342,030 2,260,561
Travelling, conveyance and entertainment 4,698,446 5,367,032
Motor vehicle expenses 2,038,136 2,063,935
Repairs and maintenance 1,257,681 3,226,459
Auditor's remuneration 31.2 1,105,000 864,500
Legal and professional charges 1,814,258 1,283,470
Fees and subscription 671,668 764,997
Donation 31.3 4,260,050 953,461
Depreciation 6.2 844,341 1,681,319
Computer expenses 1,014,021 925,126
Advertisements 165,214 93,000
Amortisation of Intangible asset 621,095 -
Others 168,348 77,737
49,747,754 54,689,456
=======================================================================================31.1. Salaries and benefits include Rs 4,526,538 (2004: Rs 5,727,384) in respect of post employment benefits (gratuity).31.2. AUDITOR'S REMUNERATION =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Audit fee 625,000 550,000
Half yearly review 225,000 200,000
Corporate governance review 60,000 50,000
Other certification / services 195,000 64,500
1,105,000 864,500
=======================================================================================31.3. Donations include Rs 200,000 (2004: Rs 650,000) paid to Jamal-ud-din Fatima Chartiable Trust in which Messer's Mohammad Abdullah, Shahid Abdullah and Nadeem Abdullah, directors and holding Company are also trustees.Donation also includes Rs 1,950,000 (2004: Rs Nil) paid to Abdullah Foundation in which Messer's Mohammad Abdullah, Yousuf Abdullah, Shahid Abdullah, Nadeem Abdullah, Amer Abdullah and Mohammad Yamin, Director of the holding company are also directors. 32. OTHER OPERATING EXPENSES =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Workers' Profit Participation Fund 20,088,074 13,544,903
20,088,074 13,544,903
=======================================================================================33. OTHER OPERATING INCOME=======================================================================================
June September
30,2005 30,2004
Note Rupees Rupees
=======================================================================================
Scrap sales 7,345,552 8,579,437
DIVIDEND INCOME:
Other companies 17,842,157 9,564,018
Associates - Related parties 33.1 6,082,468 6,498,126
Subsidiary - Related party - 80,750,000
Profit / (loss) on sale of fixed assets 11,504,751 7,764,279
Gain from transactions in
held for trading investments 5,072,558 -
Gain / (loss) due to remeasurement of
held for trading investments 1,849,002 (751,601)
Net foreign exchange gain / (loss) 2,049,080 (1,510,987)
Profit / (loss) on Booking of Unutilised F. Currency (108,981) -
Others 90,000 -
51,726,587 110,893,272
=======================================================================================33.1. DIVIDEND INCOME FROM ASSOCIATES=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Reliance Cotton Spinning Mills Limited 1,618,750 1,618,750
Sapphire Fibres Limited 4,463,718 4,879,376
6,082,468 6,498,126
=======================================================================================34. FINANCE COST=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Interest / mark up on long term loans 51,653,495 34,921,204
Interest / mark up on short term loans 84,887,085 54,873,130
Interest on Workers' Profit Participation Fund balance 780,688 745,963
Bank charges and commission 38,589,520 37,058,302
Zakat 11,138 -
175,921,926 127,566,599
Profit / Interest on certificate
on investments / deposits (843,933) (2,276)
and PLS US Dollar Deposit
Profit on PLS accounts / deposits (154,505) (304,082)
174,923,488 127,260,241
=======================================================================================35. TAXATION=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Current year 41,503,359 57,629,936
Deferred 51,396,966 27,416,213
92,900,325 85,046,149
=======================================================================================36. EARNINGS PER SHARE - BASIC AND DILUTED=======================================================================================
June September
30,2005 30,2004
=======================================================================================
Net profit after tax attributable
to ordinary shareholder 288,773,074 172,307,002
Number of ordinary shares in issue 20,083,140 20,083,140
Earnings per share - basic and diluted 14.38 8.58
=======================================================================================There is no dilutive effect on earnings per share37. CASH GENERATED FROM OPERATIONS =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Net profit before taxation 381,673,399 257,353,151
ADJUSTMENT FOR:
Depreciation 208,798,497 258,333,685
Profit on sale of Investments (5,072,558) -
Amortisation of Intangible assets 621,095 -
(Gain) / loss on sale of property, plant and equipment (11,504,751) (7,764,279)
Dividend income (23,924,626) (96,812,144)
Provision for gratuity 19,671,220 22,781,941
Exchange differences (2,049,079) 1,510,987
Fair value adjustment made in value of investment (1,849,002) 751,601
Financial expenses 175,921,926 127,566,599
Profit on deposit and held to maturity investments (998,438) (306,358)
Operating profit before working capital changes 741,287,683 563,415,183
CHANGES IN WORKING CAPITAL
(INCREASE) / DECREASE IN CURRENT ASSETS:
Inventories (611,291,033) (417,700,581)
Trade debts 174,107,172 (265,600,530)
Loans and advances 76,474,939 (41,860,551)
Trade deposits and short term prepayments 269,336 246,905
Other receivables (22,066,221) 18,389,254
(382,505,807) (706,525,503)
INCREASE / (DECREASE) IN CURRENT LIABILITIES:
Trade and other payables 85,520,350 (25,284,663)
444,302,226 (168,394,983)
=======================================================================================38. CASH AND CASH EQUIVALENTS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Cash and bank balances 41,256,301 56,528,131
Temporary overdrawn balances (2,706,679) (1,013,460)
38,549,622 55,514,671
=======================================================================================39. REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
CHIEF EXECUTIVE:
Remuneration 729,000 972,000
Rent and utilities 400,000 534,600
1,129,000 1,506,600
Number of person 1 1
DIRECTOR:
Remuneration 729,000 972,000
Rent and utilities 400,950 534,600
1,129,950 1,506,600
Number of person 1 1
EXECUTIVES:
Managerial remuneration 5,022,865 6,706,100
House rent 2,320,493 2,562,627
Cost of living allowance 22,500 22,200
Bonus 1,635,069 1,695,930
Medical 142,232 190,439
Utilities 311,049 561,986
Leave encashment and other benefits 1,317,222 2,994,537
10,771,430 14,733,819
Number of persons 10 9
Number of executives provided with the company maintain 10 9
=======================================================================================The Chief Executive and one Director were also provided with cars maintained by the holding company and telephones at residence.40. RELATED PARTY TRANSACTIONS The related parties comprises associated companies (due to common directorship), wholly owned subsidiary, directors and key management personnel. Amounts due to/ from related parties are shown in the relevant notes to the financial statements. Transaction with the related parties and associated undertaking other than remuneration and benefits to key management personnel under the term of their employment are as follows: 40.1. SUBSIDIARY =======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Store sales - 12,500
Store purchase - 2,574
Energy charges 203,746,480 268,525,365
Expenses charged 60,000 60,000
Dividend received - 80,750,000
=======================================================================================40.2. ASSOCIATED UNDERTAKINGS=======================================================================================
June September
30,2005 30,2004
Rupees Rupees
=======================================================================================
Sales 242,112,298 265,831,303
Fixed assets sales 42,263,750 -
Purchases 117,627,504 165,839,894
Energy charges 168,070,759 218,136,004
Dividend received 6,082,468 6,488,572
Dividend paid 6,812,653 6,083,068
Fixed assets purchased 32,343,125 -
Expenses charged 3,367,262 4,110,455
=======================================================================================41. PLANT CAPACITY AND ACTUAL PRODUCTION41.1. SPINNING UNIT =======================================================================================
June September
30,2005 30,2004
=======================================================================================
Total number of spindles installed 124,344 111,672
Average number of spindles worked 111,179 109,922
Total number of rotors installed 2,516 3,240
Average number of rotors worked 2,348 3,116
Number of shifts worked per day 3 3
Total days worked 272 360
Installed capacity after conversion into 20/s lbs 63,006,846 75,537,397
Actual production after conversion into 20/s lbs 66,322,952 86,627,634
=======================================================================================41.2. WEAVING UNIT=======================================================================================
June September
30,2005 30,2004
=======================================================================================
Total number of looms installed 206 170
Average number of looms worked 188 168
Number of shifts worked per day 3 3
Total days worked 272 360
Installed capacity at 50 picks per inch of
fabric square meters 37,286,180 40,725,200
Actual production converted at 50 picks per
inch of fabric square meters 42,052,946 53,664,797
=======================================================================================42. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES42.1. YIELD / MARK UP RATE RISK Yield/ mark up rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market yield/ mark up rates. Sensitivity to yield/ mark up rate risk arises from mismatches of financial assets and liabilities that mature or reprice in a given period. The Group manages these mismatches through risk management strategies where significant changes in gap position can be adjusted. The Group is exposed to yield/ mark up rate risk in respect of the following: ==================================================================================================================================================
June 30,2005
Interest/mark up bearing Non interest/mark up bearing
Total
Up to one year More than Sub total Up to one year More than Sub total
one year
Rupees
==================================================================================================================================================
FINANCIAL ASSETS:
Investment - - - 503,644,001 359,687,567 863,331,568 863,331,568
Loan and advances - - - 31,165,687 23,206,889 54,372,576 54,372,576
Trade deposits - - - 88,445 2,972,305 3,060,750 3,060,750
Trade debts - - - 976,382,566 - 976,382,566 976,382,566
Other receivables - - - 12,168,364 - 12,168,364 12,168,364
Cash and bank balances 4,209,618 - 4,209,618 37,046,683 - 37,046,683 41,256,301
4,209,618 - 4,209,618 1,560,495,746 385,866,761 1,946,362,507 1,950,572,125
FINANCIAL LIABILITIES:
Long term loans 352,343,252 1,187,617,068 1,539,960,320 - 400,000 400,000 1,540,360,320
Long term deposits - - - - 10,717,000 10,717,000 10,717,000
Short term finances 1,930,904,317 - 1,930,904,317 2,706,679 - 2,706,679 1,933,610,996
Trade and other payables 20,088,074 - 20,088,074 517,602,109 - 517,602,109 537,690,183
Interest / mark up on loan - - - 45,081,569 - 45,081,569 45,081,569
Dividends - - - 391,534 - 391,534 391,534
2,303,335,643 1,187,617,068 3,490,952,711 565,781,891 11,117,000 576,898,891 4,067,851,602
On balances sheet gap (2,299,126,025) (1,187,617,068) (3,486,743,093) 994,713,855 374,749,761 1,369,463,616 (2,117,279,477)
==================================================================================================================================================
==================================================================================================================================================
September 30, 2004
Interest/mark up bearing Non interest/mark up bearing
Total
Up to one year More than Sub total Up to More than Sub total
one year one year one year
Rupees
==================================================================================================================================================
FINANCIAL ASSETS:
Investment 7,692,100 - 7,692,100 237,562,991 333,581,557 571,144,548 578,836,648
Loan and advances - - - 107,861,213 20,855,702 128,716,915 128,716,915
Trade deposits - - - 541,600 2,964,305 3,505,905 3,505,905
Trade debts - - - 1,150,579,738 - 1,150,579,738 1,150,579,738
Other receivables - - - 321,130 - 321,130 321,130
Cash and bank balances 19,210,464 - 19,210,464 37,317,667 - 37,317,667 56,528,131
26,902,564 - 26,902,564 1,534,184,339 357,401,564 1,891,585,903 1,918,488,467
FINANCIAL LIABILITIES:
Redeemable capital 8,333,337 - 8,333,337 - - - 8,333,337
Long term loans 139,562,902 939,904,765 1,079,467,667 - 400,000 400,000 1,079,867,667
Long term deposits - - - - 19,658,889 19,658,889 19,658,889
Short term finances 1,539,805,973 - 1,539,805,973 1,013,460 - 1,013,460 1,540,819,433
Trade and other payables 13,544,903 - 13,544,903 443,339,397 - 443,339,397 456,884,300
Interest / mark up on loan - - - 16,151,916 - 16,151,916 16,151,916
Dividends - - - 361,233 - 361,233 361,233
1,701,245,115 939,904,765 2,641,151,880 460,866,006 20,058,889 1,271,658,743 3,122,076,775
On balance sheet gap (1,674,344,551) (939,904,765) (2,614,249,316) 1,073,318,333 337,342,675 619,927,160 (1,203,588,308)
==================================================================================================================================================42.2. EFFECTIVE INTEREST RATES=======================================================================================
June September
30,2005 30,2004
=======================================================================================
FINANCIAL ASSETS:
Investment - US$ bonds - 3.44 to 4.5
Cash and bank balances 1.04 - 4.58 0.75 to 1.25
FINANCIAL LIABILITIES:
Redeemable capital 4.50 to 6 4.50 to 6
Long term loans 3.58 to 9.38 4.50 to 6
Short term finances 2.70 to 9.50 1.65 to 6
=======================================================================================42.3. CONCENTRATION OF CREDIT RISKCredit risk is the risk that one party to a financial instruments will fail to discharge an obligation and to cause the other party to incur a financial loss. Concentration of credit risk arise when a number of counter parties are engaged in similar business activities or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economics, political or other conditions. The company attempts to control credit risk by monitoring credit exposure, limiting transaction with specific counter parties and continually assessing the creditworthiness of counter parties. 42.4. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of all the financial instruments reported in the financial statements approximate their fair value except as disclosed relevant note to the financial statements. 42.5. LIQUIDITY RISK Liquidity risk reflects an enterprise inability in raising funds to meet commitments. The company's management closely monitors the company's liquidity and cash flow position. 42.6. FOREIGN EXCHANGE RISK Foreign exchange risk arises mainly where receivables and payables exists due to transactions with foreign undertakings. The management manages the risk through efficient use of forward covers, where permissible. The company is not materially expose to foreign currency risk on assets and liabilities. 43. PROPOSED DIVIDEND In respect of current year the directors proposed a final cash dividend of Rs 30,124,710 (2004: Rs 30,124,710) at the rate Rs 1.50 (2004: Rs 1.50) per ordinary share of Rs 10. Proposed dividend is subject to approval by shareholders at the forthcoming annual general meeting and has not been included as a liability in these financial statements. This will be accounted for subsequently in the year of payment. 44. NUMBER OF EMPLOYEES (THE HOLDING COMPANY) =======================================================================================
June September
30,2005 30,2004
=======================================================================================
Average number of employees during the period 5,069 4,651
=======================================================================================45. DATE OF AUTHORISATION FOR ISSUEThese financial statements were authorised for issue by the Board of Directors of the Company on 6th October, 2005. 46. RECLASSIFICATION 46.1. Following reclassification / rearrangement have been made in the financial statements to incorporate changes in Fourth Schedule of Companies Ordinance 1984, except for the change as para 36.3 which is made for the better presentation. ================================================================================
Previous Classification Current Classification Amount
Relcassified
Rupees
================================================================================
Advances, deposits, prepayments
and other receivables Loan and Advances 107,861,213
Advances, deposits, prepayment
and other receivables Trade Deposits and 1,277,607
Short Term Prepayments.
Creditors, Accrued and Other Liabilities Trade and other Payables 489,809,917
Creditors, Accrued and Other Liabilities Interest Mark up on Loans 16,151,916
================================================================================46.2. NOMENCLATURE OF THE FOLLOWING ACCOUNTS HAVE BEEN CHANGED================================================================= Previous Nomenclature New Nomenclature ================================================================= Fixed Assets Property, plant and equipment Short Term Finance Short Term Borrowings Selling Expense Distribution Cost Other Charges Other Operating Expense Other Income Other Operating Income =================================================================47. GENERAL Figures have been rounded off to the nearest rupee. |