| Nishat Mills Ltd - 2005 |
============================================================================================= BALANCE SHEET AS AT 30TH JUNE 2005 ============================================================================================= (RUPEES IN THOUSAND) 30 JUNE 30 SEPTEMBER Notes 2005 2004 ============================================================================================= EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorised share capital 178 470 000 (2004: 178 470 000) ordinary shares of Rupees 10 each 1 784 700 1 784 700 Issued, subscribed and paid up share capital 145 259 743 (2004: 145 259 743) fully paid ordinary shares of Rupees 10 each 3 1 452 597 1 452 597 Reserves 4 10 468 761 8 049 547 11 921 358 9 502 144 NON-CURRENT LIABILITIES: Long term finances 5 2 796 512 2 617 117 Liabilities against assets subject to finance lease 6 61 643 5 756 2 858 155 2 622 873 CURRENT LIABILITIES: Trade and other payables 7 812 216 808 544 Accrued markup 8 88 449 31 847 Short term finances 9 4 284 815 5 608 985 Current portion of long term liabilities 10 711 164 816 545 Provision for taxation 356 689 190 689 6 253 333 7 456 610 Contingencies and commitments 11 21 032 846 19 581 627 ASSETS NON-CURRENT ASSETS: Property, plant and equipment 12 9 151 096 8 132 083 Long term investments 13 4 113 421 3 357 958 Long term Loans 14 4 890 639 Long term deposits, prepayments and deferred cost 15 12 022 16 604 13 281 429 11 507 284 CURRENT ASSETS: Stores, spare parts and loose tools 16 424 827 434 934 Stock-in-trade 17 2 897 392 2 899 808 Trade debts 18 877 358 1 606 087 Short term investments 19 2 173 530 1 651 566 Loans and advances 20 429 533 447 100 Short term deposits and prepayments 21 39 180 37 819 Other receivables 22 388 598 381 647 Cash and bank balances 23 520 999 615 382 7 751 417 8 074 343 21 032 846 19 581 627 ============================================================================================= ============================================================================================= PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 30 JUNE 2005 ============================================================================================= (RUPEES IN THOUSAND) Notes 2005 2004 ============================================================================================= Sale 24 11 374 630 14 875 877 Cost of goods sold 25 9 239 731 12 941 953 Gross profit 2 134 899 1 933 924 Distribution and selling costs 26 510 463 707 185 Administrative and general expenses 27 180 126 219 574 690 589 926 759 Operating profit 1 444 310 1 007 165 Other income 28 700 526 371 283 2 144 836 1 378 448 Finance costs 29 407 696 425 235 Workers' participation fund 65 675 47 711 473 371 472 946 Profit before taxation 1 671 465 905 502 Provision for taxation 30 166 000 154 442 Profit after taxation 1 505 465 751 060 Earnings Per Share - Basic (Rupees) 31 10.36 5.17 ============================================================================================= ============================================================================================= CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2005 ============================================================================================= (RUPEES IN THOUSAND) Note 2005 2004 ============================================================================================= CASH FLOWS FROM OPERATING ACTIVITIES: Profit before taxation 1 671 465 905 502 ADJUSTMENTS FOR NON-CASH CHARGES AND OTHER ITEMS: Depreciation 600 252 756 929 Gain on disposal of operating fixed assets (59 506) (47 697) Gain on sale of investment (425 630) (147 802) Amortisation of deferred cost 1 778 80 824 Finance costs 407 696 425 235 CASH FLOWS FROM OPERATING ACTIVITIES: Before working capital changes 2 196 055 1 972 991 CASH FLOWS FROM WORKING CAPITAL CHANGES: (Increase)/decrease in current assets Stores, spare parts and loose tools 10 107 (25 921) Stock-in-trade 2 416 (891 930) Trade debts 728 729 (470 118) Loans and advances 136 821 (43 075) Short term deposits and prepayments (1 943) 13 150 Other receivables (6 951) 7 463 INCREASE/(DECREASE) IN CURRENT LIABILITIES: Trade and other payables 1 551 158 674 Short term finances (1 324 170) 1 129 585 Net cash used in working capital changes (453 440) (122 172) Cash generated from operating activities 1 742 615 1 850 819 Finance costs paid (351 094) (443 665) Income tax paid (116 675) (141 850) Net cash generated from operating activities 1 274 846 1 265 304 CASH FLOWS FROM INVESTING ACTIVITIES: Long term loans (6 830) (665) Long term deposits, prepayments and deferred cost 3 386 (247) Proceeds from disposal of operating fixed assets 270 874 245 619 Proceeds from sale of equity investment 639 514 203 232 Investment made (332 604) (16 076) Fixed capital expenditure (1 743 535) (1 703 273) Net cash used in investing activities (1 169 195) (1 271 410) CASH FLOWS FROM FINANCING ACTIVITIES: Long term finances 700 000 700 000 Repayment of long term finances (626 123) (830 754) Repayment of finance lease liabilities (31 074) (110 125) Dividend paid (242 837) (182 498) Net cash used in financing activities (200 034) (423 377) Net decrease in cash and cash equivalents (94 383) (429 483) Cash and cash equivalents at the beginning of the period/year 615 382 1 044 865 Cash and cash equivalents at the end of the period/year 23 520 999 615 382 ============================================================================================= =============================================================================================================================== STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2005 =============================================================================================================================== (RUPEES IN THOUSAND) Share Premium on Fair Value General Unapprop- Shareho- Capital issue of Reserve Reserve riated lders' Note right shares profit Equity =============================================================================================================================== Balance as on 30 September 2003 1 224 788 1 027 622 553 189 3 312 518 7 6 118 124 Fair value gain - - 1 227 114 - - 1 227 114 Profit for the year - - - - 751 060 751 060 Proposed dividend - - - - (244 958) (244 958) Transfer to general reserve - - - 506 000 (506 000) - Balance as on September 30, 2004 1 224 788 1 027 622 1 780 303 3 818 518 109 7 851 340 Effect of change in accounting policy 2.2 - - - - 244 958 244 958 Effect of scheme of arrangement for merger with Umer Fabrics Limited as approved by honourable High Court Lahore 227 809 - 675 150 500 510 2 377 1 405 846 Balance as on September 30, 2004- restated 1 452 597 1 027 622 2 455 453 4 319 028 247 444 9 502 144 Dividend @ Rs 2 per share - - - - (244 958) (244 958) Fair value gain adjusted on sale of investment - - (316 394) - - (316 394) Fair value gain for the period - - 1 475 101 - - 1 475 101 Profit for the period - - - - 1 505 465 1 505 465 Transfer to general reserve - - - 1 142 000 (1 142 000) - Balance as on 30 June 2005 1 452 597 1 027 622 3 614 160 5 461 028 365 951 11 921 358 =============================================================================================================================== =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
PROPOSED DIVIDEND:
Rupees 2.50 (2004: Rupees 2.00) per share 363 149 244 958
=============================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 20051. THE COMPANY AND ITS OPERATIONS Nishat Mills Limited is a public company incorporated in Pakistan under the Companies Act, 1913 (Now Companies Ordinance, 1984) and listed on Stock Exchanges in Pakistan. Its registered office is situated at 53-A, Lawrence Road, Lahore. The company is engaged in the business of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing, printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fibre and cloth, and to generate, accumulate, distribute and supply electricity. The Lahore High Court sanctioned the scheme of arrangement for Amalgamation of Umer Fabrics Limited with the company and Nishat (Chunian) Limited with effect from 01 October 2004. According to the scheme of arrangement, members of Umer Fabrics Limited are receiving 94.90 ordinary shares of Rupees 10 each of Nishat Mills Limited and 5.10 ordinary shares of Rupees 10 each of Nishat (Chunian) Limited for each 100 shares held in Umer Fabrics Limited. These financial statements have been prepared on uniting of interest basis in accordance with the International Accounting Standard 22 "Business Combination". 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1. ACCOUNTING CONVENTION These financial statements have been prepared in Pak Rupees under the historical cost convention as modified by the revaluation of equity investments as stated in note 2.8. 2.2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of the Companies Ordinance, 1984. Approved accounting standards comprise of such International Accounting Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or directives issued by the Securities and Exchange Commission of Pakistan (SECP) differ with the requirements of these standards, the requirements of Companies Ordinance, 1984 or the requirements of the said directives take precedence. The SECP has substituted the fourth schedule to the Companies Ordinance, 1984 vide notification No. 589(1)/2004 dated 05 July 2004. Due to this, accounting policies regarding recognition of proposed dividend subsequent to the year's end, capitalisation of the exchange differences (note 2.5) and recognition and amortization of deferred cost (note 2.10) have been changed accordingly. In the previous years, proposed dividend after the balance sheet date was recognised as a liability at the balance sheet date. As per new policy, the dividends declared after the balance sheet date are considered as non-adjusting event and are not recognised in the financial statements. Had there been no change in this accounting policy, the comparative figures of un-appropriated profit and current liabilities would have been lower and higher respectively by Rupees 244.958 million. However, there is no impact of this change on the results of current period. 2.3. STAFF RETIREMENT BENEFITS The company operates an approved funded provident fund scheme covering all permanent employees. Equal monthly contributions are made both by the company and employees at the rate of 9.5 percent of the basic salary to the fund. 2.4. TAXATION Current The company falls in the ambit of presumptive tax regime under section 169 of the Income Tax Ordinance, 2001. Provision for income tax is made in the accounts accordingly. However, provision for tax on other income is based on taxable income at the current rates after considering the rebates and tax credits available, if any. Deferred Deferred tax is accounted for by using the liability method on all timing differences between the carrying amounts of assets and liabilities in the financial statements and their tax base. Deferred tax liabilities are recognised for all taxable temporary differences. The company recognizes deferred tax assets on all deductible temporary differences to the extent that it is probable that future taxable profits will be available against which these deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. 2.5. FOREIGN CURRENCY All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rates of exchange prevailing at the balance sheet date or at the contracted rates while foreign currency transactions are initially recorded at the rates of exchange prevailing at the transaction date or at the contracted rates. Exchange risk fee is charged to profit and loss account. From the current period, the company charges all the exchange differences to profit and loss account. Previously, exchange differences on loans utilised for the acquisition of fixed assets were capitalised and all other exchange differences were charged to income. This change in accounting policy has no effect on the amounts reported for the current period. Quantification and adjustments in respect of opening balances were impracticable. 2.6. OPERATING FIXED ASSETS, DEPRECIATION AND CAPITAL WORK-IN-PROGRESS Operating fixed assets except freehold land are stated at cost less accumulated depreciation and impairment losses. Capital work-in-progress and freehold land are stated at cost less impairment loss, if any. Cost of operating fixed assets consists of historical cost, applicable exchange differences (up to 30 September 2004) and directly attributable cost of bringing the assets to working condition. Borrowing cost pertaining to the construction/erection period is also capitalized as part of historical cost. Depreciation is charged to income applying the reducing balance method at the rates given in note 12.1 to write off the cost of operating fixed assets including the related exchange differences over their expected useful life. No depreciation is charged on assets deleted during the year. Full year's depreciation is charged on additions except major additions or extensions to production facilities, which are depreciated on pro-rata basis for the period of use during the year. Maintenance and normal repairs are charged to income as and when incurred. Major renewals and improvements are capitalised. Gain or loss on disposal of operating fixed assets is recognized in profit and loss account. 2.7. ASSETS SUBJECT TO FINANCE LEASE These are stated at lower of present value of minimum lease payments under the lease agreements and the fair value of assets acquired on lease. Aggregate amount of obligation relating to assets subject to finance lease is accounted for at net present value of liabilities. Assets so acquired are amortised over their expected useful life at the rates mentioned in note 12.2. 2.8. INVESTMENTS Investments are initially recognised on trade-date at cost, comprising of consideration paid and cost of transaction. For listed securities, closing quotations of stock exchanges on last working day of the accounting year are considered for determining fair value, while for unquoted securities, fair value is determined considering break-up value of the securities. Its classification is made on the basis of intended purpose for holding such investments. Management determines the appropriate classification of its investments at the time of purchase and re-evaluates such designation on regular basis and presents in the balance sheet on the following basis: Held-to-Maturity These are stated at amortized cost less impairment loss, if any, recognized to reflect irrecoverable amounts. Impairment losses are charged to profit and loss account. Held-for-Trading These are recognized at fair value and changes in carrying values are included in profit and loss account. Available-for-Sale These are stated at fair value and changes in carrying values are recognized in equity until investment is sold or determined to be impaired at which time the cumulative gain or loss previously recognised in equity is included in profit and loss account for the year/period. 2.9. STORES, SPARE PARTS AND LOOSE TOOLS These are valued at cost calculated on moving average basis except goods-in-transit which are valued at cost. 2.10. DEFERRED COSTS These are amortised over a period of five years from the year of occurrence. During the period, the company has changed its accounting policy regarding recognition of deferred cost to comply with Circular No 1 of 2005 dated January 19, 2005 issued by the SECP. As per new policy, no cost shall be recorded as deferred cost after this change. There is no impact of this change in accounting policy on profit and loss account for the current period. 2.11. BORROWING COST Interest, mark-up and other charges on long-term liabilities are capitalized up to the date of commissioning of respective fixed assets acquired out of the proceeds of such long term liabilities. All other interest, mark-up and other charges are recognized in profit and loss account. 2.12. STOCK-IN-TRADE Raw materials, work-in-process and finished goods are valued at the lower of average cost and net realisable value except waste/rags, which are valued at contract prices. Stocks of yarn/cloth purchased are valued at weighted average cost. Average cost and net realizable value are defined as under: Average cost (i) For raw materials - Annual average basis.
(ii) For work-in-process - Average manufacturing cost including a proportion
and finished goods of production overheads.
Net realisable value - Selling prices in the ordinary course of business less the
estimated cost of completion and selling expenses
incidental to sales.2.13. RECEIVABLESReceivables are carried at original invoice amount less an estimate made for doubtful receivable balances based on review of outstanding amounts at year's end. Bad debts are written off when identified. 2.14. REVENUE RECOGNITION Revenue from sales is recognised on delivery of goods to customers. Dividend income on equity investments is recognised as income when the right to receive the dividend is established. Profit on deposits with banks is recognised on time proportion basis taking into account the amounts outstanding and rates applicable thereon. 2.15. FINANCIAL INSTRUMENTS Financial assets and liabilities are recognised at cost which is the fair value of the consideration given or received at the time when the company becomes a party to the contractual provisions of the instrument by following trade date accounting. A financial asset or part thereof is derecognised when the Company loses control of the contractual right that comprises the financial asset or part thereof. Such control is deemed to be lost if the company realises the rights to the benefits specified in the contracts, the rights expire or the Company surrenders those rights. A financial liability or part thereof is removed from the balance sheet when it is extinguished i.e. when the obligation specified in the contract is discharged, cancelled or expired. Any gain or loss on subsequent measurement and de-recognition is accounted for in profit and loss account. 2.16. PROVISIONS Provisions are recognized when the company has a 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 obligations and a reliable estimate of the amount can be made. 2.17. IMPAIRMENT The carrying amounts of the company's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated and impairment losses are recognised. 2.18. OFFSETTING Financial assets and financial liabilities are set off and the net amount is reported in the financial statements when there is a legally enforceable right to set off and the company intends either to settle on a net basis, or to realise the assets and to settle the liabilities simultaneously. 2.19. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise of cash and bank balances. 2.20. RELATED PARTY TRANSACTIONS AND TRANSFER PRICING Transactions and contracts with the related parties are carried out at an arm's length price determined in accordance with comparable uncontrolled price method. 3. ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
67 762 264 (2004: 67 762 264) ordinary shares of
Rupees 10 each fully paid up in cash 3.1 677 623 677 623
37 252 280 (2004: 37 252 280) fully paid ordinary shares
of Rupees 10 each issued for consideration
other than cash 3.2 372 522 372 522
40 245 199 (2004: 40 245 199) ordinary shares of
Rupees 10 each issued as fully paid bonus shares 402 452 402 452
1 452 597 1 452 597
=============================================================================================3.1. 18 324 901 (2004:18 324 901) ordinary shares of the company are held by the associated undertakings.3.2. 22 780 940 ordinary shares of Rupees 10 each have been issued as fully paid shares to the shareholders of Umer Fabrics Limited in accordance with the scheme of arrangement approved by the Lahore High Court, Lahore. 4. RESERVES Composition of reserves is as follows: =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
CAPITAL:
Premium on the issue of right shares 1 027 622 1 027 622
Fair value reserve 3 614 160 2 455 453
4 641 782 3 483 075
REVENUE:
General 5 461 028 4 319 028
Unappropriated profit 365 951 247 444
5 826 979 4 566 472
10 468 761 8 049 547
=============================================================================================5. LONG TERM FINANCES - SECUREDLong term finances utilised under markup arrangements are as under: =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
National Bank of Pakistan 5.1 135 000 202 500
United Bank Limited 5.2 262 500 300 000
Habib Bank Limited 5.3 150 000 206 250
Askari Commercial Bank Limited - 66 668
Term Finance Certificates 5.4 149 880 299 760
Habib Bank Limited 5.5 106 875 142 500
Saudi Pak Industrial and Agricultural
Investment Company (Private) Limited 5.6 75 000 100 000
National Insurance Company Limited 5.7 187 500 225 000
Term Finance Certificates 5.8 999 400 999 600
The Bank of Punjab - 150 000
Citibank N.A. 5.9 500 000 500 000
Standard Chartered Bank Limited 5.10 200 000 200 000
ABN Amro Bank 5.11 200 000 -
United Bank Limited 5.12 300 000 -
Allied Bank of Pakistan 5.13 200 000 -
3 466 155 3 392 278
Less: Current Portion 10 669 643 775 161
2 796 512 2 617 117
=============================================================================================5.1. This is secured against exclusive mortgage charge on new machinery of power plant unit of the company and personal guarantee of the directors and chief executive officer.It carries markup @ 2.5 percent above cut off yield of 6-months Treasury Bills, payable on quarterly basis. The finance is repayable in 20 equal quarterly installments commenced from 28 February 2002. 5.2. This is secured against first pari passu charge on all present and future fixed assets of the company, including land, building and machinery and personal guarantee of the chief executive officer. It carries markup @ 1 percent above three months KIBOR, payable quarterly. The finance is repayable in 8 semi annual installments commenced from 31 December 2004. 5.3. This is secured against first hypothecation charge on specific plant and machinery and carries markup @ 50 bps above six months KIBOR immediately preceding the base rate fixing date, payable on quarterly basis. The finance is repayable in 16 equal quarterly installments commenced from 01 September 2003. 5.4. These were issued in sets of eight TFCs' with a face value of Rupees 5 000 Rupees 25 000 Rupees 50,000 and Rupees 100,000 to individual investors and of Rupees 100,000 to institutional investors in September 2001 for a term of four years. These are secured by a ranking charge on fixed assets and carry profit @ 14.5 percent in the first year and from second year, 1.50 percent above State Bank of Pakistan discount rate with 13 percent floor and 17 percent cap, payable on semi annual basis. These are redeemable in four semi annual installments commenced from March 19, 2004. 5.5. This is secured against first exclusive charge on fixed assets of the company. It carries markup @ 50 bps above six month KIBOR, payable on quarterly basis. The finance is repayable in sixteen equal quarterly installments commenced from 30 November 2003. 5.6. This is secured against ranking hypothecation charge on plant and machinery and personal guarantee of chief executive officer. It carries mark up equal to State Bank of Pakistan discount rate with 7.50 percent floor, payable on quarterly basis. The finance is repayable in twelve equal quarterly installments commenced from 25 December 2004. 5.7. This is secured against ranking hypothecation charge on plant and machinery. It carries markup @ 1.50 percent above the State Bank of Pakistan discount rate with 11.50 percent floor and 16 percent ceiling payable on semi annual basis. The finance is repayable in eight equal semi annual installments commenced from 26 March 2004. 5.8. These are issued to a consortium of banks and secured against first pari passu hypothecation charge on fixed assets of the company with 25 % margin. It carries profit @ 1.70 percent above weighted average market yield of the last three auctions of 6 months Treasury Bills, payable semi annually. The finance is redeemable in ten semi annual installments commenced from 16 March 2004. The first five installments are of Rupees 0.200 million each and the remaining five installments are of Rupees 199.800 million each. 5.9. This is secured against first ranking pari passu charge on fixed assets, excluding land and building, with 25% margin on facility amount. It carries markup @ 60 bps above 6 months KIBOR, payable on semi annual basis. The finance is repayable in eight semi annual installments commencing from 25 March 2006. 5.10. This is secured against exclusive hypothecation charge on plant, machinery and equipments installed at Bhikki. It carries markup @ 0.5 percent above the average 3 months ASK KIBOR, payable on quarterly basis. The finance is repayable in six semi annual equal installments commencing from 30 September 2006. 5.11. This is secured against first pari passu charge on the present and future fixed assets of the company excluding land and building. It carries markup @ 60 bps above three months KIBOR payable on quarterly basis. The finance is repayable in seventeen equal quarterly installments commencing from 15 February 2006. 5.12. This is secured against mortgage charge or charge on the immovable property and machinery of the company. It carries markup @ 0.5 percent above six months KIBOR, payable on quarterly basis. The finance is repayable in eight semi annual equal installments commencing from 30 June 2006. 5.13. This is secured against first exclusive charge on unencumbered specific Machinery for Rupees 267 million. It carries markup @ 75 bps above six months KIBOR. The finance is repayable in four semi annual equal installments commencing from February 24, 2006. 6. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE The rate of interest used as the discounting factor, implicit in leases, ranges from 8.50 to 11.75 percent per annum (2004: 8.50 to 9.00 percent per annum). The amount of future payments and periods during which they fall due are: =============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
30 JUNE/SEPTEMBER:
2005 - 43 383
2006 50 694 5 827
2007 34 346 -
2008 35 217 -
120 257 49 210
Less: Un-amortised finance charges 17 093 2 070
103 164 47 140
Less: Current portion 10 41 521 41 384
61 643 5 756
=============================================================================================6.1. Rentals are paid in monthly/quarterly equal installments. Taxes, repairs and insurance costs are to be borne by the company.The company shall have no right to terminate the lease agreements and if the lease agreements are terminated, the company shall pay entire amount of rentals for un-expired period of lease agreements. Lease agreements are renewable at the option of lessors on such terms as may be agreed upon. Liabilities are secured against personal guarantee of directors, demand promissory notes and security deposits of Rupees 4.900 million (2004: Rupees 7.831 million) (note 21). 6.2. RECONCILIATION OF MINIMUM LEASE PAYMENTS AND THEIR PRESENT VALUE IS GIVEN BELOW ===============================================================================
(RUPEES IN THOUSAND)
===============================================================================
2005 2004
===============================================================================
Minimum Present value Minimum Present value
lease of minimum lease of minimum
Payments lease Payments lease
Payments Payments
===============================================================================
Due within one year 50 694 41 521 43 383 41 384
Due after one year but
not later than five years 69 563 61 643 5 827 5 756
120 257 103 164 49 210 47 140
===============================================================================7. TRADE AND OTHER PAYABLES=============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Creditors 7.1 423 101 425 630
Advances from customers 21 218 57 055
Employees' provident fund trust - 4 754
Securities from contractors - Interest free repayable
on completion of contracts 7 099 6 181
Income tax deducted at source 1 949 1 246
Other accrued liabilities 278 045 252 959
Dividend payable 15 129 13 008
Worker's participation fund 7.2 65 675 47 711
812 216 808 544
=============================================================================================7.1. Creditors include an amount of Rupees 33.107 million (2004: Rupees 10.004 million) payable to the related parties.7.2. WORKERS' PARTICIPATION FUND =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Balance as at October 1 47 711 28 696
Interest accrued thereon 29 2 000 1 006
Add: Profit allocated for the year 7.3 65 675 47 711
115 386 77 413
LESS:
Payments made to trust 49 710 29 702
Payments made to Government
Rupees 1 136 (2004: Rupees 110) 1 -
49 711 29 702
65 675 47 711
=============================================================================================7.3. The company retains workers' participation fund for its business operations till the date of allocation to workers.Interest is paid at prescribed rate under the Companies Profit (Workers' Participation Act, 1968) on funds utilised by the company till the date of allocation to workers (note 29). No provision for Workers' Participation Fund has been made against profit on sale of equity investments amounting to Rupees 425.630 million in the light of an opinion given by a legal advisor. 8. ACCRUED MARKUP =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
Mark-up accrued on long term finances 54 899 9 928
Markup on short term finances 33 550 21 919
88 449 31 847
=============================================================================================9. SHORT TERM FINANCES=============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
FROM BANKING COMPANIES:
Secured 9.1 4 241 920 5 584 811
Temporary bank overdraft 9.2 42 895 24 174
4 284 815 5 608 985
=============================================================================================9.1. These are secured against joint pari passu hypothecation charge on all present and future current assets, all marketable securities, instruments, personal guarantees of directors and a second charge on fixed assets of the company.These form part of total credit facility of Rupees 11 010 million (2004: Rupees 9 360 million). Mark-up is charged at the rate of Paisas 7.12 to 24.93 per Rupees 1 000 per day (2004: Paisas 4.38 to 23.29 per Rupees 1 000 per day) and mark-up/profit on export refinance at the rate of 1.90 to 8 percent (2004: 1.90 to 3 percent) per annum. 9.2. This represents the unsecured overdrawn bank balances from banking companies and carries mark-up at the rate of paisas 6.85 to 26.02 per Rupees 1 000 per day (2004: Paisas 6 to 22 per Rupees 1 000 per day). 10. CURRENT PORTION OF LONG TERM LIABILITIES =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Long term finances 5 669 643 775 161
Liabilities against assets subject to finance lease 6 41 521 41 384
711 164 816 545
=============================================================================================11. CONTINGENCIES AND COMMITMENTSContingencies (i) The company is contingently liable for Rupees 61.891 million (2004: Rupees 61.891 million) on account of central excise duty not acknowledged as debt as the cases are pending before Court. (ii) Guarantees of Rupees 235.051 million (2004: Rupees 240.046 million) have been given by the banks of the Company to Sui Northern Gas Pipelines Company Limited against gas connections, Shell Pakistan Limited against purchase of furnace oil and collector of customs. Commitments (i) Contracts for capital expenditure are approximately amounting to Rupees 664.662 million (2004: Rupees 487.345 million). (ii) Letters of credit other than for capital expenditure are amounting to Rupees 77.875 million (2004: Rupees 407.755 million). 12. PROPERTY, PLANT AND EQUIPMENT =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Operating fixed assets 12.1 7 926 838 7 631 620
Assets subject to finance lease 12.2 160 070 118 428
Capital work-in-progress 12.3 1 064 188 382 035
9 151 096 8 132 083
=============================================================================================12.1. OPERATING FIXED ASSETS=============================================================================================================================================================
(RUPEES IN THOUSAND)
=============================================================================================================================================================
COST ACCUMULATED DEPRECIATION BOOK VALUE DEPRECIATION
DESCRIPTI0N As at Additions As at As at As at 30 AS AT 30 Charge for Rate
01 October (Deletions) 30 June 01 October (Adjustments) June June the period/ %
2004 2005 2004 2005 2005 year
=============================================================================================================================================================
Freehold land 177 327 37 001 209 728 - - - 209 728 - -
(4 600)
Buildings on freehold land 2 009 328 49 490 2 058 818 895 282 - 980 802 1 078 016 85 520 10
Plant and machinery 9 520 196 956 644 10 044 621 3 664 086 (237 681) 3 888 167 6 156 454 461 762 10
(432 219)
Electric installations 447 363 8 120 455 483 200 440 - 219 546 235 937 19 106 10
Factory equipment 88 197 5 758 93 955 48 652 - 51 981 41 974 3 329 10
Furniture, fixtures and
office equipment 208 147 12 332 220 412 89 718 (46) 99 478 120 934 9 806 10
(67)
Vehicles 158 576 31 551 167 804 79 336 (10 114) 84 009 83 795 14 787 20
(22 323)
2005 12 609 134 1 100 896 13 250 821 4 977 514 (247 841) 5 323 983 7 926 838 594 310
(459 209)
2004 11 444 220 1 662 079 12 609 134 4 532 987 (299 243) 4 977 514 7 631 620 743 770
(497 165)
=============================================================================================================================================================12.1.1. DEPRECIATION CHARGE FOR THE PERIOD/YEAR HAS BEEN ALLOCATED AS FOLLOWS=============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Cost of goods sold 25.2 569 638 710 801
Distribution and selling costs 26 2 432 3 342
Administrative and general expenses 27 22 240 29 627
594 310 743 770
=============================================================================================12.1.2. DISPOSAL OF FIXED ASSETS===============================================================================================================================================================
(RUPEES IN THOUSAND)
DESCRIPTION Qty Cost Accumulated Book Sales proceeds Mode of Particulars of purchaser
Nos. depreciation value disposal
===============================================================================================================================================================
LAND:
Land - 50, Main Gulberg, 1 CANAL
Lahore. 10 Sft 4 600 - 4 600 7 500 Negotiation Mrs. Mussarat Aziz W/O Mian Abdul Aziz,
House #3 Nishat Mills Officers Colony
Faisalabd.
PLANT AND MACHINERY:
Cards and Cross Roll Filter 15 22 126 13 547 8 579 11 515 Negotiation Al Qadir Textile Mills Limited, 6.K.M. Jhelum
Road Chakwal.
Sizing Machine 1 9 987 5 688 4 299 5 500 Negotiation Al-Sheikh Enterprises, Faisalabad.
Auto Coner 7 34 071 24 308 9 763 26 500 Negotiation Colony Thai Textile Mills Limited, Bhakkar.
Scutchers 2 8 171 7 083 1 088 1 700 Negotiation Colony Textile Mills Limited, Multan.
Comber 1 1 072 894 178 500 Negotiation Ghazi Fabrics International Ltd. 8-C,E/3
Gulberg-lll , Lahore.
Air Compressor 1 125 - 125 110 Negotiation Meo Engineering Co, II, Floor Khawja
Arcade 22/19 A, Abbott Road, Lahore.
Cards 15 11 467 9 032 2435 5 146 Negotiation Noorani Spinning Industries, 32-K.M
Lahore Road Sheikhupura.
Blow Room and Cards 18 53 813 42 785 11 028 16 366 Negotiation RizwanTextile Mills Limited, Chakwal.
Auto Coners 6 48 681 34 966 13 715 25 872 Negotiation Rizwan Textile Miils Limited, Chakwal.
Cards 4 5 239 2 455 2 784 2 940 Negotiation Spin Cot Textile Mills, Sargodha Road,
Sheikhupura.
Scutchers 2 16 380 12 311 4 069 2 844 Negotiation Spin Cot Textile Mills, Sargodha Road,
Sheikhupura.
Auto Coners 4 27 495 17 211 10 284 17 300 Negotiation Sally Textile Mills Limited, Johar Abad.
Auto Coner 1 8 980 6 317 2 663 4 200 Negotiation Tribal Textile Mills Limited, Tank Road,
Bacha Abad, D.I.Khan.
Auto Coners 4 35 920 25 269 10 651 16 800 Negotiation Rawal Textile Mills Limited, Manoo Pur,
Sheikhupura.
Over Head Cleaners 10 11 562 5 769 5 793 1 000 Negotiation Jaca Tex, F-321/A Site Karachi
Sulzer Looms 16 49 249 29 471 19 778 20 000 Negotiation Rana Textile Mills Ltd, Rafhan Mills Road,
Faisalabad.
Knotting Machine 1 783 575 208 500 Negotiation Mr. Waseem, Dilawar Industries ,5-Puli
Small Estate, Faisalabad.
Blow Room 1 27 342 - 27 342 27 342 Sale and Leased Standard Chartered Modarba,Standard
Back Chartered Main Branch Building, I.I.
Chundrigar Road Karachi.
Cards 11 57 672 - 57 672 57 672 Sale and Leased Standard Chartered Modarba,Standard
Back Chartered Main Branch Building, I.I.
Chundrigar Road Karachi.
Cooling Tower 1 2 084 - 2 084 2 084 Sale and Leased Standard Chartered Modarba,Standard
Back Chartered Main Branch Building, I.I.
Chundrigar Road Karachi.
VEHICLES:
Suzuki Cultus LRK-8478 1 602 217 385 385 Negotiation Mr. Badar Rauf, Company's Ex-Employee
SuzukiAl to LRH-5490 1 503 181 322 333 Negotiation Mr.WaqasAslam, 525/1-Z Block Defence
Lahore
Mercedez Benz LXN-0300 1 8 078 5 431 2 647 5 650 Negotiation Orix Leasing Pakistan Ltd, State Life
Building,SirAgha Khan III Road, Lahore.
Suzuki Khyber FDV-5692 1 373 275 98 98 Negotiation Mr.Jaffer Ali, Company's Employee
Toyota Corolla LXW-7057 1 998 589 409 409 Negotiation Ms. Asma Hussain, House # 231-A, New
Muslim Town Lahore.
Toyota Corolla LXX.6607 1 1 130 551 579 830 Negotiation Captive Aire, Basement,39- Main
Boulevard Cavalry Ground,Lahore.
Mercedez Benz LZH-0500 1 6 124 - 6 124 7 200 Negotiation Gerry's International (Pvt) Ltd, 58-A -2,
Ghalib Market,Gulberg Ill,Lahore.
Suzuki Baleno LXM-4952 1 628 463 165 265 Negotiation Mr. Badar-ul-Hassan, Company's
Employee.
Suzuki Cultus FDZ-9412 1 586 286 300 500 Negotiation Mr.Javaid Mahmood Mian, House # 207
G -Block Model Town, Lahore.
Toyota Hi Lux LXK-8880 1 1 728 1 162 566 700 NegotIation Mr.Mahboob Alam, Chak #43, Post Office
Chak44, Tehsil Feroz Wala, Distt
Sheikhupura.
Suzuki Alto LXH-5361 1 475 280 195 342 Negotiation Mr.Javaid Hussain Bikhtiari, House #493
X Street # 13 Defence, Lahore.
Honda Civic LXN-0331 1 950 561 389 670 Negotiation Mr.Anees Alam, House # 36/H Block
Model Town, Lahore.
===============================================================================================================================================================12.2. ASSETS SUBJECT TO FINANCE LEASE===================================================================================================================================================
(RUPEES IN THOUSAND)
C 0 S T ACCUMULATED DEPRECIATION BOOK VALUE DEPRECIATION RATE
DESCRIPTI0N As at Additions/ As at As at As at 30 AS AT 30 CHARGE FOR THE %
01 October (Deletions) 30 June 01 October (Adjustments) June June PERIOD/YEAR
2004 2005 2004 2005 2005 (NOTE 25.2)
===================================================================================================================================================
Plant and machinery 156 619 87 098 185 096 38 191 (19 107) 25 026 160 070 5 942 10
(58 621)
2005 156 619 87 098 185 096 38 191 (19 107) 25 026 160 070 5 942
(58 621)
2004 411 619 - 156 619 84 399 (59 367) 38 191 118 428 13 159
(255 000)
===================================================================================================================================================12.2.1. Deletions represent the assets purchased at the expiry of lease term and transferred to operating fixed assets.12.3. CAPITAL WORK-IN-PROGRESS =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
THIS COMPRISES OF:
Building on freehold land 266 691 56 382
Plant and machinery 667 056 268 201
Electric installation 28 048 -
Unallocated capital expenditure 11 475 26
Letter of credit against machinery 43 984 28 640
Letter of credit against building material 33 770 22 973
Advances against vehicles 13 164 5 813
1 064 188 382 035
=============================================================================================13. LONG TERM INVESTMENTS=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
AVAILABLE FOR SALE
RELATED PARTIES
QUOTED
D.G. Khan Cement Company Limited
57 901 600 (2004: 52 637 819) fully paid ordinary
shares of Rupees 10 each. Equity held 31 .40%. 1 752 317 1 752 317
13 159 454 (2004: 13 159 454) fully paid redeemable
cumulative preference shares of Rupees 10 each.
Extent of investment held 37.23%. 131 594 131 594
MCB Bank Limited (formerly Muslim
Commercial Bank Limited)
8 619 036 (2004: 2 952 035) fully paid ordinary shares
of Rupees 10 each. Equity held 2.02% 324 867 68 945
UNQUOTED:
Pakistan Aviators and Aviation (Private) Limited
4 000 (2004: Nil) fully paid ordinary shares of
Rupees 10 each. Equity held 40% 13 000 -
Nishat Shuaiba Paper Product Company Limited
5 500 000 (2004: Nil) fully paid ordinary shares
of Rupees 10 each. Equity held 24.87% 55 000 -
Security General Insurance Company Limited
853 139 (2004: 775 581) fully paid ordinary shares
of Rupees 10 each. Equity held 7.05% 5 250 5 250
2 282 028 1 958 106
Fair Value Surplus 1 831 393 1 399 852
4 113 421 3 357 958
=============================================================================================13.1. The company may at its option convert the preference shares into non-voting ordinary shares, at the expiry of the period of four years after issuance / allotment, to be converted at face value of Rupees 10 each, if the same are not redeemed, with the right of refusal to preference shareholders, individually.13.2. Nil (2004: 2 218 000) ordinary shares of D.G. Khan Cement Company Limited are pledged against finance obtained from Askari Commercial Bank Limited. 14. LONG TERM LOANS =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Loans to employees - Considered good 14.1 & 14.2 8 572 1 742
Less: Current portion 3 682 1 103
4 890 639
=============================================================================================14.1. These are unsecured and interest free loans to company's employees which include loan amounting to Rupees 4.698 million (2004: Rupees 0.622 million) given to executives of the company for house building.Loan is recoverable in equal monthly installments. Maximum debit balance due from executives at the end of any month during the period was Rupees 5.784 million (2004: Rupees 1.060 million). 14.2. RECONCILIATION OF LOANS GIVEN TO EXECUTIVES IS GIVEN BELOW =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
Balance as at October 1 622 560
Add: Disbursements made 5 845 500
6 467 1 060
Less: Repayments received 1 769 438
4 698 622
=============================================================================================15. LONG TERM DEPOSITS, PREPAYMENTS AND DEFERRED COST=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
DEPOSITS:
Securities against leased assets - 2 400
Other securities 8 989 8 705
Margin against bank guarantees 184 189
9173 11 294
PREPAYMENTS:
Commission on bank guarantees - 1 184
Office and shop rent 3 100 3 181
3 100 4 365
Deferred cost 15.1
TFC Issuance charges 1 780 3 341
Other expenses 73 290
1 853 3 631
14 126 19 290
LESS: CURRENT PORTION:
Commission on bank guarantees - 916
Office and shop rent 2 104 1 770
2 104 2 686
12 022 16 604
=============================================================================================15.1. RECONCILIATION OF DEFERRED COST IS GIVEN BELOW=============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Balance as at October 1 3 631 82 775
Add: TFC issuance and other expenses - 1 680
3 631 84 455
Less: Amortised during the period/year 26 & 27 1 778 3 987
Export quota impaired - 76 837
1 778 80 824
1 853 3 631
=============================================================================================16. STORES, SPARE PARTS AND LOOSE TOOLS=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
Stores including in transit Rupees 22.999 million
(2004: Rupees 48.997 million) 263 456 298 531
Spare parts 160170 135 150
Loose tools 451 503
Discarded machinery held for disposal 750 750
424 827 434 934
=============================================================================================17. STOCK-IN-TRADE=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
Raw materials 1 193 467 1 082 518
Work-in-process 877 560 862 971
Finished goods (Including in transit Rupees
122.021 million) 17.1 826 365 954 319
2 897 392 2 899 808
=============================================================================================17.1. It includes goods valued at NRV amounting to Rupees 56.700 million (2004: Rupees 52.916 million).18. TRADE DEBTS =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
CONSIDERED GOOD:
Unsecured 499 991 358 711
Secured (Against letters of credit) 377 367 1 247 376
877 358 1 606 087
=============================================================================================19. SHORT TERM INVESTMENTS
=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
AVAILABLE FOR SALE
RELATED PARTIES
QUOTED
Nishat (Chunian) Limited
9 786 882 (2004: 6 781 988) fully paid ordinary
shares of Rupees 10 each. Equity held 14.32% 115 700 121 592
MCB Bank Limited (formerly Muslim Commercial Bank Limited)
15 259 420 (2004: 24 120 256) fully paid ordinary
shares of Rupees 10 each. Equity held 3.58% 254 780 462 772
Adamjee Insurance Company Limited
132 934 (2004: 7 934) fully paid ordinary shares
of Rupees 10 each Equity held 0.16% 9 345 665
UNQUOTED
Security General Insurance Company Limited
964 860 (2004: 877 145) fully paid ordinary
shares of Rupees 10 each. Equity held 7.97% 5 938 5 938
OTHERS-QUOTED
Pakistan Strategic Allocation Fund
500 000 (2004: 500 000) fully paid certificates
of Rupees 10 each. 5000 5000
390 763 595 967
Fair value surplus 2 099 161 1 055 599
Fair value surplus realiseddjusted (316 394) -
1 782 767 1 055 599
2 173 530 1 651 566
=============================================================================================20. LOANS AND ADVANCES=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
ADVANCES
CONSIDERED GOOD:
Employees - Interest free 6 407 9 358
Suppliers 64 553 101 562
Contractors - 1 250
Letters of credit 2 479 3 518
Employees' provident fund trust 6 610 -
Income tax 332 675 216 000
Other advances 16 809 115 412
429 533 447 100
CONSIDERED DOUBTFUL:
Others 108 108
Less: Provision for doubtful 108 108
429 533 447 100
=============================================================================================21. SHORT TERM DEPOSITS AND PREPAYMENTS=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
DEPOSITS:
Securities against leased assets 4 900 5 431
Other securities 776 776
Central excise duty 22 498 22 268
28 174 28 475
Short term prepayments 11 006 9 344
39 180 37 819
=============================================================================================22. OTHER RECEIVABLESThese are as under =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
CONSIDERED GOOD:
Export rebates and claims 84 374 98 212
Sales tax receivable 297 264 268 680
Profit receivable on bank deposits 45 8
Miscellaneous receivables 6 915 14 747
388 598 381 647
=============================================================================================23. CASH AND BANK BALANCES=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
CASH WITH BANKS IN:
Current accounts 365 108 547 201
Fixed deposit accounts 150 031 64 384
515 139 611 585
Cash in hand 5 860 3 797
520 999 615 382
=============================================================================================24. SALES=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
Export 9 478 636 12 343 890
Local 24.1 2 070 259 2 776 429
Processing income 23 273 45 067
11 572 168 15 165 386
Less: Commission to selling agents 197 538 289 509
11 374 630 14 875 877
=============================================================================================24.1. LOCAL SALES=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
Sales 2 348 349 3 228 316
Less: Sales tax 278 090 451 887
2 070 259 2 776 429
=============================================================================================24.2. Exchange gain due to currency rate fluctuation relating to export sales amounting to Rupees 2.933 million (2004: Rupees 7.353 million) has been included in export sales.25. COST OF GOODS SOLD =============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Raw materials consumed 25.1 3 128 727 5 219 625
Cloth and yarn purchased/used 2 787 906 3 968 625
Processing charges 37 238 37 289
Salaries, wages and other benefits 660 012 798 056
Staff retirement benefits 19 990 23 728
Stores, spare parts and loose tools 811 738 1 054 147
Packing materials 207 506 248 359
Repair and maintenance 84 171 161 409
Fuel and power 693 458 909 112
Insurance 15 824 20 439
Other factory overheads 104 216 121 830
Depreciation 25.2 575 580 723 960
9 126 366 13 286 579
WORK-IN-PROCESS:
Opening stock 862 971 688 254
Closing stock (877 560) (862 971)
(14 589) (174 717)
Cost of goods manufactured 9 111 777 13 111 862
FINISHED GOODS
Opening stock 954 319 784 410
Closing stock (826 365) (954 319)
127 954 (169 909)
9 239 731 12 941 953
=============================================================================================25.1. RAW MATERIALS CONSUMED=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
Opening stock 1 082 518 432 614
Add: Purchases 3 239 676 5 869 529
4 322 194 6 302 143
Less: Closing stock 1 193 467 1 082 518
3 128 727 5 219 625
=============================================================================================25.2. DEPRECIATION=============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Owned assets 12.1.1 569 638 710 801
Leased assets 12.2 5 942 13 159
575 580 723 960
=============================================================================================26. DISTRIBUTION AND SELLING COSTS=============================================================================================
(RUPEES IN THOUSAND)
Notes 2005 2004
=============================================================================================
Salaries, wages and other benefits 32 346 36 893
Staff retirement benefits 720 755
Outward freight and distribution 402 075 503 974
Amortisation of deferred cost 15.1 217 77 893
Rent, rates and taxes 1 864 2 383
Legal and professional - 141
Insurance 521 647
Travelling and conveyance 29 078 29 481
Vehicles' running 60 113
Entertainment 332 447
Advertisement 5 116 2 662
Postage, telephone and telegram 34 697 46 980
Electricity and sui gas 233 442
Printing and stationery 441 726
Repair and maintenance 329 181
Fee and subscription 2 125
Depreciation - owned assets 12.1.1 2 432 3 342
510 463 707 185
=============================================================================================27. ADMINISTRATIVE AND GENERAL EXPENSES=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
Salaries, wages and other benefits 93 687 111 359
Staff retirement benefits 4 794 5 921
Amortisation of deferred cost 15.1 1 561 2 931
Rent, rates and taxes 1 148 2 974
Legal and professional 6 609 8 651
Insurance 1 671 3 404
Travelling and conveyance 7 592 6 214
Vehicles' running 8 050 11 337
Entertainment 2 943 4 194
AUDITORS' REMUNERATION:
Audit fee 1 056 1 006
Half yearly review 325 296
Reimbursable expenses 14 14
1 395 1 316
Advertisement 96 70
Postage, telephone and telegram 2 465 4 028
Electricity and sui gas 4 654 6 795
Printing and stationery 7 085 9 266
Repair and maintenance 2 623 3 152
Fee and subscription 1 667 1 833
Donation (There is no interest of any director or
his spouse in donees fund) 3 525 1 909
Miscellaneous 6 321 4 593
Depreciation - owned assets 12.1.1 22 240 29 627
180 126 219 574
=============================================================================================28. OTHER INCOME=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
INCOME FROM FINANCIAL ASSETS:
Dividend income 28.1 176 108 98 918
Gain on sale of investment 425 630 147 802
Profit on deposit with banks 2 540 23 198
604 278 269 918
INCOME FROM NON-FINANCIAL ASSETS:
Gain on disposal of operating fixed assets 59 506 47 697
Sale of scrap, empties and inventories 35 900 51 705
Sale of export quota - 118
Rental income 112 1 211
Miscellaneous 730 634
700 526 371 283
=============================================================================================28.1. DIVIDEND INCOME=============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
FROM RELATED PARTIES:
D.G. Khan Cement Company Limited 92 116 55 270
Umer Fabrics Limited - 13 467
MCB Bank Limited (formerly Muslim
Commercial Bank Limited) 73 362 27 611
Nishat (Chunian) Limited 8 477 2 570
Security General Insurance Company 1 653
175 608 98 918
OTHERS:
Pakistan Strategic Allocation Fund 500 -
176 108 98 918
=============================================================================================29. FINANCE COSTS=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
INTEREST ON:
Long term loans - 1 110
Employees' provident fund trust 429 753
Workers' participation fund 7.2 2 000 1 006
MARK-UP ON:
Long term finances 172 764 195 577
Short term finances 175 951 128 998
Finance charges on lease liabilities 1 684 7 213
Bank charges and commission 54 868 90 578
407 696 425 235
=============================================================================================30. PROVISION FOR TAXATION=============================================================================================
(RUPEES IN THOUSAND)
Note 2005 2004
=============================================================================================
Current - for the period/year 30.1 166 000 154 442
=============================================================================================30.1. The company falls under the ambit of presumptive tax regime under section 169 of the Income Tax Ordinance, 2001.Provision for income tax is made accordingly. Provision on dividend income is made under section 5 of the Income Tax Ordinance, 2001. However, provision is made on other income (excluding dividend income) @ 35 percent under normal law as the company has no carry forwardable tax losses. 30.2. Provision for deferred tax is not required as the company is chargeable to tax under section 169 of the Income Tax Ordinance, 2001 and no timing differences are expected to arise in the foreseeable future. 31. EARNINGS PER SHARE -BASIC There is no dilutive effect on the basic earnings per share, which is based on: =============================================================================================
2005 2004
=============================================================================================
Profit attributable to
ordinary shareholders (Rupees in thousand) 1 505 465 751 060
Ordinary shares (Numbers) 145 259 743 145 259 743
Earnings per share - Basic (Rupees) 10.36 5.17
=============================================================================================32. CHIEF EXECUTIVE OFFICER'S, DIRECTORS' AND EXECUTIVES' REMUNERATIONAggregate amount charged in the accounts for the period/year for remuneration and allowances, including all benefits to Chief Executive Officer, Directors and Executives of the company is as follows: ===================================================================================================
(RUPEES IN THOUSAND)
===================================================================================================
2005 2004
===================================================================================================
DESCRIPTION Chief Chief
Executive Directors Executives Executive Directors Executives
Officer Officer
===================================================================================================
Managerial remuneration 2 400 1 165 9 358 2 900 1 267 9 077
ALLOWANCES:
Cost of living allowance - 3 64 - 5 66
Housing 1 080 520 3 631 1 305 565 3 438
Conveyance - - 24 - - 29
Medical - 9 320 - 13 279
Utilities 120 50 620 145 52 712
Special - 2 27 - 2 24
Company's contribution to
Provident fund trust - 88 808 - 89 784
Leave encashment - - 236 - - -
3 600 1 837 15 088 4 350 1 993 14 409
Number of Persons 1 3 18 1 3 13
===================================================================================================32.1. Chief Executive Officer, three Directors and certain Executives of the company have been provided free maintained vehicles and certain Executives are also provided free housing facility with utilities.32.2. No remuneration was paid to directors as meeting fee during the current period and previous year. 33. NUMBER OF EMPLOYEES =============================================================================================
2005 2004
=============================================================================================
At the period / year end 13 201 13 108
=============================================================================================34. TRANSACTIONS WITH RELATED PARTIESThe related parties comprise associated undertakings, other related companies and key management personnel. The company in the normal course of business carries out transactions with various related parties. Amount due to related parties is disclosed in note 7.1 and remuneration of the key management personnel is disclosed in note 32. =============================================================================================
(RUPEES IN THOUSAND)
2005 2004
=============================================================================================
Purchase of goods and services 86 813 112 848
Sale of goods 359799 169810
Sale of fixed assets - 1 204
Dividend income 175 608 98 918
Dividend paid 25 570 19 067
=============================================================================================35. PLANT CAPACITY AND ACTUAL PRODUCTION=============================================================================================
(FIGURES IN THOUSAND)
2005 2004
=============================================================================================
SPINNING:
100 % plant capacity converted to 20s count based
on 3 shifts per day for 819 shifts (2004:1 098 shifts) (Kgs.) 43 194 58 051
Actual production converted to 20s count based
on 3 shifts per day for 819 shifts (2004:1 098 shifts) (Kgs.) 39 365 56 389
WEAVING:
100 % plant capacity at 50 picks based on 3 shifts
per day for 819 shifts (2004:1 098 shifts) (Sq.Mt.) 138 572 168 674
Actual production converted to 50 picks based
on 3 shifts per day for 819 shifts (2004:1 098 shifts)(Sq.Mt.) 131 219 159 183
DYEING AND FINISHING:
Capacity for 3 shifts per day for 819 shifts
(2004: 1 098 shifts) (Mt.) 25 500 34 200
Actual at 3 shifts per day for 819 shifts
(2004:1 098 shifts) (Mt.) 23 015 32 609
POWER PLANT:
Generation capacity (KWH) 251 003 489 847
Actual generation (KWH) 205 928 282 459
=============================================================================================35.1. REASON FOR LOW PRODUCTIONUnder utilization of available capacity is mainly due to normal maintenance. For power plant, the capacity utilisation is low because of some old engines, which could not be run at rated capacity. 36. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES 36.1. INTEREST/MARK-UP RATE RISK Interest/mark-up rate risk and sensitivity of the company's financial liabilities and financial assets as at June 30, 2005 can be evaluated from the following: =======================================================================================================================
(RUPEES IN THOUSAND)
=======================================================================================================================
2005
=======================================================================================================================
TOTAL EXPOSED TO EXPOSED TO NOT
INTEREST/MARK-UP INTEREST/MARK-UP EXPOSED
RATE PRICE RISK RATE CASH FLOW RISK TO
Within More than Within More than INTEREST/
One One Year One One Year MARK-UP
Year and Upto Year and Upto RATE RISK
Five Years Five Years
=======================================================================================================================
LIABILITIES
Long term finances 3 466 155 - - 669 643 2 796 512 -
Liabilities against leased assets 103 164 41 521 61 643 - - -
Short term running finances 4 284 815 4 284 815 - - - -
Trade and other payables 744 592 - - - - 744 592
Accrued markup 88 449 - - - - 88 449
8 687 175 4 326 336 61 643 669 643 2 796 512 833 041
ASSETS
Long term loans 8 572 - - - - 8 572
Long term deposits 9 173 - - - - 9 173
Short term investments 2 173 530 - - - - 2 173 530
Trade debts 877 358 - - - - 877 358
Loan and advances 2 725 - - - - 2 725
Short term deposits 776 - - - - 776
Other receivables 6 960 - - - - 6 960
Cash and bank balances 520 999 150 031 - - - 370 968
3 600 093 150 031 - - - 3 450 062
Total interest/mark-up rate
sensitivity gap (5 087 082) (4 176 305) (61 643) (669 643) (2 796 512) 2 617 021
Unrecognized financial instruments
Contract for capital expenditure 664 662 - - - - 664 662
Letter of credit other than for
capital expenditure 77 875 - - - - 77 875
=======================================================================================================================The company usually borrows funds at market based rates and as such the risk is minimised. Significant interest rate and cash flow risks exposures are primarily managed by contracting floor and cap of interest rates on major finances.36.2. EFFECTIVE INTEREST / MARK-UP RATES (2005) FINANCIAL LIABILITIES: Long term finances: 3.74 to 13 percent per annum Liabilities against leased assets: 8.50 to 11.75 percent per annum Short term running finances: 2.50 to 9.50 percent per annum Export refinances: 1.90 to 8 percent per annum FINANCIAL ASSETS: Cash with banks on fixed deposits: 0.1 to 11 percent per annum 36.3. INTEREST/MARK-UP RATE RISK Interest/mark-up rate risk and sensitivity of the company's financial liabilities and financial assets as at 30 September 2004 can be evaluated from the following: ======================================================================================================================
(RUPEES IN THOUSAND)
======================================================================================================================
2004
======================================================================================================================
TOTAL EXPOSED TO EXPOSED TO NOT
INTEREST/MARK-UP INTEREST/MARK-UP EXPOSED
RATE PRICE RISK RATE CASH FLOW RISK TO
Within More than Within More than INTEREST/
One One Year One One Year MARK-UP
Year and Upto Year and Upto RATE RISK
Five Years Five Years
======================================================================================================================
LIABILITIES 0
Long term finances 3 392 278 - - 775 161 2 617 117 -
Liabilities against leased asset 47 140 41 384 5 756 - - -
Short term running finances 5 608 985 5 608 985 - - - -
Trade and other payables 754 833 - - - - 754 833
Accrued markup 31 847 - - - - 31 847
9 835 083 5 650 369 5 756 775 161 2 617 117 786 680
ASSETS
Long term loans 1 742 - - - - 1 742
Long term deposits 8 894 - - - - 8 894
Short term investments 1 651 566 - - - - 1 651 566
Trade debts 1 606 087 - - - - 1 606 087
Loans and advances 8255 - - - - 8255
Short term deposits 776 - - - - 776
Other receivables 14 755 - - - - 14 755
Cash and bank balances 615 382 64384 - - - 550 998
3 907 457 64 384 - - - 3 843 073
Total interest/mark-up rate
sensitivity gap (5 927 626) (5 585 985) (5 756) (775 161) (2 617 117) 3 056 393
UNRECOGNISED FINANCIAL INSTRUMENTS:
Contract for capital expenditure 487 345 - - - - 487 345
Letter of credit other than for
capital expenditure 407 755 - - - - 407 755
======================================================================================================================36.4. EFFECTIVE INTEREST / MARK-UP RATES (2004)FINANCIAL LIABILITIES: Long term finances: 2.46 to 13 percent per annum Liabilities against leased assets: 8.50 to 9 percent per annum Short term running finances: 1.60 to 8.5 percent per annum Export refinances: 1.90 to 3 percent per annum FINANCIAL ASSETS: Cash with banks on fixed deposits: 0.1 to 6 percent per annum 36.5. CREDIT RISK The management of the company believes that the company is not exposed to major concentration of credit risk. Further, the company controls its credit risk by ascertainment of credit worthiness of customers, monitoring of debt on a continuous basis and providing appropriate provision for doubtful receivables where it is considered necessary. 36.6. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying values of financial assets and financial liabilities approximate their fair values. 36.7. FOREIGN EXCHANGE RISK Foreign currency risk on financial instruments receivable and payable in foreign currency is not material. 36.8. LIQUIDITY RISK Liquidity risk reflects an enterprises inability in raising funds to meet commitments. The company follows an effective cash management and planning policy to ensure availability of funds and to take appropriate measures for new requirements. 37. AUTHORISATION OF FINANCIAL STATEMENTS These financial statements were approved and authorised by the board of directors for issue on September 19, 2005. 38. FIGURES * Comparative figures have been re-arranged, wherever necessary, for the purpose of comparison. Comparative figures of balance sheet and statement of changes in equity have been re-arranged due to merger of Umer Fabrics Limited, change in accounting policy (note 2.2) and certain revisions necessitated by revised Fourth Schedule to the Companies Ordinance, 1984. However, in case of merger, the comparative figures of profit and loss account and cash flow statement could not be restated due to the problem of divisibility between Nishat Mills Limited and Nishat (Chunian) Limited. * The financial statements have been prepared for the period of nine months from 01 October 2004 to June 30, 2005 due to change of accounting year under legislature. Therefore, the comparative figures in profit and loss account, cash flow statement and statement of changes in equity are not comparable to the current period. * Figures have been rounded off to the nearest thousand of Rupees. |