| Ghandhara Nissan Ltd - 2006 |
|
BALANCE SHEET AS AT 30 JUNE 2006
===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
ASSETS
NON CURRENT ASSETS
Fixed Assets 5 979,152 1,024,982
Long Term Investment 6 -
Long Term Deposits 7 5,161 2,380
Long Term Prepayment 8 - 5,400
984,313 1,032,762
CURRENT ASSETS
Stores, spares and loose tools 9 38,872 32,535
Stock-in-trade 10 1,346,001 1,323,055
Trade debts 11 342,112 57,411
Loans and Advances 12 33,215 11,583
Prepayments 13 10,041 8,060
Other receivables 14 69,849 152,194
Cash and bank balances 15 36,567 41,243
1,876,657 1,626,081
2,860,970 2,658,843
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Share Capital 16 450,025 450,025
Share Premium 17 40,000 40,000
Accumulated Profit / (Loss) 42,153 (68,667)
532,178 421,358
SURPLUS ON REVALUATION OF FIXED ASSETS 18 300,907 335,266
833,085 756,624
NON CURRENT LIABILITIES
Long Term Financing 19 322,397 520,730
Liabilities against assets subject to finance lease 20 7,350 1,265
Long Term Deposits 21 15,611 15,611
Deferred Liabilities 22 202,797 53,615
548,155 591,221
CURRENT LIABILITIES
Trade and other payables 23 642,160 1,001,959
Accrued Mark-up/interest 24 19,544 7,082
Short term financing 25 50,000 -
Financings under mark up arrangement 26 490,279 151,715
Current portion of long term financing 27 183,333 133,333
Current portion of liabilities against assets subject to
finance lease 20 6,054 1,489
Provision for taxation 28 88,360 15,420
1,479,730 1,310,998
CONTINGENT LIABILITIES & COMMITMENTS 29
2,860,970 2,658,843
===============================================================================PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2006===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
NET SALES 30 4,440,210 3,504,212
COST OF SALES 30 3,819,968 3,122,696
GROSS PROFIT 620,242 381,516
DISTRIBUTION COST 31 34,395 20,279
ADMINISTRATIVE EXPENSES 32 88,416 63,757
OPERATING PROFIT 497,431 297,480
OTHER OPERATING EXPENSES 33 25,888 15,571
FINANCE COST 34 101,077 34,553
370,466 247,356
OTHER OPERATING INCOME 35 20,424 27,490
PROFIT FOR THE YEAR BEFORE TAXATION 390,890 274,846
TAXATION
Current (134,005) (37,475)
Prior years 15,297 10,138
Deferred (139,468) 22,545
(258,176) (4,792)
PROFIT FOR THE YEAR AFTER TAXATION 132,714 270,054
BASIC EARNING PER SHARE (Rupees per share) 36 2.95 6.00
===============================================================================CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2006===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Net cash used-in Operating Activities 37 (227,562) (7,051)
INVESTING ACTIVITIES
Fixed capital expenditure (37,664) (119,164)
Long term deposits (2,781) (1,452)
Sale proceed of fixed assets 206 162
Net cash used in Investing Activities (40,239) (120,454)
Net cash flow before Financing Activities (267,801) (127,505)
FINANCING ACTIVITIES
Repayment of Lease liability (5,567) (1,392)
Short Term Financing 50,000 -
Increase in Finances under mark-up arrangement 338,564 79,723
Dividend paid (55,539) -
Long Term Loan received - 100,000
Repayment of Long Term Financing-Holding Company (15,000) -
Repayment of Long Term Financing (49,333) (78,667)
Net cash from Financing Activities 263,125 99,664
Decrease in cash and cash equivalents 38 (4,676) (27,841)
===============================================================================STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2006=============================================================================================================================
Share Share Accumulated
Capital Premium (Loss) / Total
Profit
Rupees in '000
=============================================================================================================================
Balance as at 01 July 2004 450,025 40,000 (376,975) 113,050
Profit for the Year - - 270,054 270,054
Transferred from surplus on revaluation
of Fixed Assets on account of incremental
depreciation charged during the year - - 38,254 38,254
Balance as at 30 June 2005 450,025 40,000 (68,667) 421,358
Profit for the Year - - 132,714 132,714
Dividend - - (56,253) (56,253)
Transferred from surplus on revaluation
of Fixed Assets on account of incremental
depreciation charged during the year - - 34,359 34,359
Balance as at 30 June 2006 450,025 40,000 42,153 532,178
=============================================================================================================================NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 20061. CORPORATE INFORMATION Ghandhara Nissan Limited (the Company) was incorporated on 8 August 1981 in Pakistan as a Private Limited Company and subsequently converted into a Public Limited Company on 24 May 1992. The registered office of the Company is situated at Ghandhara House, 109/2 Clifton, Karachi. Its manufacturing facilities are located at Port Qasim, Karachi. The Company's shares are listed on Karachi Stock Exchange. The principal activity of the Company is assembly/progressive manufacture of Nissan passenger Cars, Trucks and Buses, import and marketing of Nissan vehicles and assembly of other vehicles under contract agreement. 2. STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of 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 the 3. BASIS OF PREPARATION The financial statements are presented in Pak Rupees, rounded to nearest thousand. The financial statements have been prepared on historical cost basis except for revaluation of certain fixed assets and as referred to in note 4.3, and certain staff retirement benefits which have been recognised at present value as determined by actuary. The preparation of financial statements in conformity with approved accounting standards requires the use of certain accounting estimates. It also requires management to exercise its judgment in the process of applying the company's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience, including expectations of future events that are believed to be reasonable under the circumstances. The areas involving higher degree of judgments or complexity or areas where assumptions and estimates are significant to the financial statements are as follows: a) Retirement benefit obligations b) Provision for taxation c) Accrued liabilities d) Useful life of depreciable assets 4. SIGNIFICANT ACCOUNTING POLICIES 4.1. Employee benefits Defined Benefit Plan The Company operates an unfunded gratuity scheme for all its employees who have completed their minimum period of service with the company. The Actuarial Valuation was conducted on 30 June 2006, based on the "Projected Unit Credit Method". Defined Contribution Plan The company operates defined contribution plan (i.e. recognized provident fund scheme). Equal monthly contributions at the rate 7.5% of the basic salary and cost of living allowance are made to the fund both by the company and employees. The assets of the fund are held separately under the control of trustees. Employee Compensated Absences The company makes provision for absences on the basis of accumulated leaves and the last drawn salary. 4.2. Taxation Current The charge for the current tax is based on the results for the year as adjusted for items which are non assessable or disallowed. It is calculated using applicable lax rate after taking into account available tax credits, if any, or one half percent of turnover, whichever is higher. Deferred Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amount for financial statements reporting purposes. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized 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 utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date. 4.3. Property, Plant and Equipment Owned Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment loss, if any except for freehold land, factory building, plant and machinery. Freehold land, factory buildings, plant and machinery are stated at revalued amounts less depreciation on factory building, plant and machinery and impairment charged if any subsequent to date of revaluation. Depreciation on assets other than freehold land is charged to income applying the reducing balance method at the rates indicated in note 5 from the date assets are put in use upto the date assets are in use. Leasehold land is amortised over the remaining period of lease The depreciation method and useful lives of items of fixed assets arc reviewed periodically and altered if circumstances or expectations have changed significantly. Any change is accounted for as a change in accounting estimate by changing the depreciation charge for the current and future years. Any surplus arising on revaluation of freehold land, factory buildings, plant and machinery is credited to the surplus on revaluation account. Valuations are performed frequently enough to ensure that the fair value of the revalued asset does not differ materially from its carrying amount. An amount equivalent to difference between depreciation based on the revalued carrying amount of the assets and depreciation based on original cost is transferred from Surplus on revaluation and deferred taxation to unappropriated profit and Profit and loss account respectively. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Repairs and maintenance are charged to expenses as and when incurred. Major renewals and replacements are capitalized. Gain/losses on sale of property, plant and equipment are charged to profit and loss account currently, except that the related surplus on revaluation of property, plant and equipment (net of deferred taxation) is transferred directly to unappropriated profit Leased Assets held under finance leases are recognized as assets of the Company at the lower of present value of minimum lease payments and fair value at the date of acquisition. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are charged to the income statement over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Depreciation is charged at the same rate as company owned assets. Capital work in progress Capital work in progress is stated at cost less impairment loss, if any 4.4. Intangible Assets Cost associated with developing or maintaining computer software programs are recognized as an expense. Costs that are directly associated with identifiable and unique software products controlled by the Company and will probably generate economic benefits exceeding costs beyond one year, are recognized as Intangible assets. Direct costs include staff cost, costs of the software development team and an appropriate portion of relevant overheads. Expenditure which enhances or extends the performance of computer software programs beyond their original specifications is recognized as a capital improvement and added to the original cost of the software. Computer software development costs recognized as assets are amortized using the reducing balance method at the rates indicated in note 5. 4.5. Investments Investment in associated companies is accounted for using the equity method. Other investments held by the company are classified as being available for sale and are stated at fair value. 4.6. Stores, spares and tools Stores, spares and tools are stated at the lower of cost and net realisable value. The cost of inventory is based on weighted average cost. Items in transit are stated at cost accumulated to balance sheet date. 4.7. Stock-in-trade These are valued at lower of cost and net realisable value. The cost of various classes of stock-in-trade is determined as follows: Complete Knock Down (CKD) Kits At identifiable import costs and incidentals Complete Buildup Units (CBU) At identifiable import costs and incidentals Local raw materials At cost on weighted average basis Work in process and Finished goodsAt cost which comprises of raw materials, import incidentals, direct labour and appropriate portion of overheads Stock in transit At invoice price plus all charges paid thereon to the balance sheet date Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. 4.8. Foreign Currency Translation 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 pak rupees at the exchange rates prevailing on the balance sheet date. All gain and losses are recognized in the income currently. 4.9. Revenue Recognition Trading (a) Vehicles are treated as sold when invoiced and delivered. Commission income is recognized on the basis of shipment. Warranty claims are recognized in the accounts as and when accepted. (b) Spare part sales are recorded on the basis of dispatches made to the customers. 5 Manufacturing (a) Vehicles are treated as sold when invoiced and dispatched to customers. (b) Return on deposits is accounted for on accrual basis. 4.10. Impairment An impairment loss is recognized whenever the carrying amount of an asset exceeds the recoverable amount. Impairment losses are recognized in the profit and loss account. 4.11. Related parties transactions All transactions with related parties are carried out by the company at arms length prices using methods prescribed under the Companies Ordinance, 1984. 4.12. Borrowing Cost Borrowing 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 charge to income in the period in which they are incurred. 4.13. Provisions Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. 4.14. Warranty The Company recognized the estimated liability to repair or replace products still under warranty at the balance sheet date to the extent of non-reimbursable portion from the principal. 4.15. Financial assets and liabilities Financial assets and financial liabilities are recognised when the company become a party to the contractual provisions of the instrument. All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. These financial assets and liabilities are subsequently measured at fair value, amortised cost or cost as the case may be. The particular measurement method adopted are disclosed in individual policy statements associated with each item. Long Term Deposits These are stated at cost which represents the fair value of the consideration given. Receivables Receivables are measured at original invoice amount less an estimate made for doubtful receivable balances based on the review of all outstanding amounts at the year end. Bad debts are written off when identified. Trade and other payables Liabilities for trade and other payables are measured at cost which is the fair value of the consideration to be paid in future for goods and services received. 4.16. Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow statement, cash and cash equivalents comprise of cash and bank balances. 4.17. Bank borrowings Interest-bearing bank loans and overdrafts are initially recorded at proceeds received. Finance charges are accounted for on an accrual basis and are included in current liabilities to the extent of the amount remaining unpaid. 4.18. Offsetting of financial assets and financial liabilities Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if the company has legally enforceable right to set off the recognized amounts and intends either to settle on the net basis or to realize the asset and settle the liability simultaneously. if any. 4.19. Dividend Distributions Dividend distribution to the shareholders is accounted for as a liability in the period in which it is approved by the shareholders. 5. FIXED ASSETS ===============================================================================
2006 2005
Notes Rupees in '000
===============================================================================
Properly, plant and equipment 5.1 958,105 1,024,047
Intangible assets 5.5 626 935
Capital work in progress 5.7 20.421 -
979,102 1,024,982
===============================================================================5.1. PROPERTY, PLANT AND EQUIPMENT=============================================================================================================================================
COST/ OR VALUA TION DEPRECIATION Written Down Rate
As at Disposal*/ As at As at Disposal* / As at Value
PARTICULARS Additions For the year
July 1, 2005 Transfer** June 30, 2006 July 1,2005 Transfer** June 30,2006 June 30,2006 %
Rupees in '000
=============================================================================================================================================
OWNED ASSETS
FREE HOLDL AND 92.035 - 92,835 - 92,835
LEASEHOLD LAM) 15,000 - 15,000 1,500 1,500 13,500 10
BUILDING ON FREE
HOLD LAND 307,148 - 307,148 33,193 27,396 60,559 246,559 10
PLANT.& MACHINERY 732,515 7,572 - 740,087 106,193 63,006 169,199 570,888 10
ASSEMBLY JIGS 33,120 - - 33,120 33,120 33,120 -
FURNITURE & FIXTURE 2,500 397 - 2,897 1,552 100 1,652 1,245 10
VEHICLES 7,496 6,434 24 * 13,906 1,684 1,750 5 3,437 10,469 20
OTHER EQUIPMENTS 5,243 639 - 5,802 1,884 281 - 2,165 3,717 33
OFFICE EQUIPMENTS 2,586 984 - 3,570 2,259 1,214 3,503 67 33
COMPUTERS 6,444 1,217 V 7,661 4,552 763 5,315 2,346 33
1,204,887 17,243 24 1,222,106 184,467 96,018 5 280,480 941,626
LEASED
VEHICLES 5,009 16,217 24** 21,202 1,380 3,348 5 4,723 16,479 20
5,009 16,217 24 21,202 1,389 3,348 5 4,723 16,479
TOTAL-2006 1,209,896 33,460 48 1,243,308 185,847 99,366 10 285,203 958,105
TOTAL - 2005 1,092,472 118,093 676 1,209,889 90,493 96,025 676 185,842 024,047
=============================================================================================================================================5.1. Freehold land, Factory building on freehold land and Plant and Machinery were revalued on 30 June 1997, 30 June 1999 and 1 January 2004.The surplus arising on revaluation was credited to surplus on revaluation of fixed assets account. ==============================================================================
Freehold Factory Plant & Total
Land Building Machinery
Rupees '000
==============================================================================
As on 30 June 1997 7,379 29,741 - 37,120
As on 30 June 1999 - 30,582 88,949 119,531
As on 1 January 2004 24,000 5,949 141,998 171,947
31,379 66,272 230,947 328,598
==============================================================================5.3. The latest valuation as on 1 January, 2004 was carried out by Consultancy Support & Services Management Consultants, independent valuer. The valuation undertaken was based on the followingLand Present market value in the similar area Factory Building Present replacement value discounted for appropriate depreciation Plant & Machinery Replacement value of similar machinery at current exchange rates discounted depreciation depending on the age, maintenance, usage and change in technology obsolescence. 5.4. Had there been no revaluation, the net book value of respective fixed assets at cost less accumulated depreciation would amount to: ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Freehold land 55,310 61,456
Factory Building 165,364 183,738
Plant and Machinery 161,761 179,734
===============================================================================5.5. INTANGIBLE ASSETS=======================================================================================================================================
COST AMORTISATRION Written Down Rate
As at Disposal/ As at As a Disposalds / As at Value
PARTICULARS Additions For the year
July 1, 2005 - **June 30, 2006 July 1, 2005 ** June 30,2006 June 30,2006 %
Rupees in '000
=======================================================================================================================================
COMPUTER SOFTWARE 1,701 - - 1,701 767 308 - 1,075 626 33
TOTAL 2006 1,701 - - 1,701 767 308 - 1,075 626
TOTAL-2005 630 1,071 - 1,701 630 136 - 766 935
=======================================================================================================================================5.6. Depreciation and amortisation for the year has been apportioned as follows:===============================================================================
2006 2005
Rupees in '000
===============================================================================
Cost of sales 95,540 93,130
Administrative Expenses 3,018 2,331
99,366 96,161
===============================================================================5.7. CAPITAL WORK IN PROGRESSThe amount represents payments made to various contractors for electrical and civil works at plant. ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Civil works 10,855 -
Electrical works 9,566 -
20,421 -
===============================================================================6. LONG TERM INVESTMENTS===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Associated undertaking
Ghandhara Industries Limited - Equity basis
1,291,271 Ordinary Shares of Rs 10 each
Equity held 19.70%
Market value Rs 41,321 thousands (2005: Rs 31,894 thousands)
Cost 6.1 53,897 53,897
Share of post acquisition losses 53,897 53,897
- -
Others-Available for sale
Automotive Testing & Trading Center (Private) Limited 1,050 1,050
187,500 Ordinary Shares of Rs 10 each
Less: Provision for impairment in the value of investment 1,050 1,050
- -
- -
===============================================================================6.1. The Company holds 19.70% (2005:19.70%) of direct equity holding in the investee company. The investee company is an associate of the company by virtue of common directorship.6.2. The company's share in profit of associate for the nine months period ended March 31, 2006 amounted to Rs95.868 million (2005:Rs 18.969 million) and the company's unrecognised share in accumulated losses of the associate amount to Rs Nil (2005:Rs 73.222 million). The share in net assets of associate has been determined on the basis of unaudited financial statements for the nine months period ended March 31, 2006. The summarised financial information based on the unaudited financial statements for the year ended 31 March, 2006 is as follows: ===============================================================================
As at As at
March 31,2006 June 30,2005
===============================================================================
Assets 988,917 782,918
Liabilities 790,425 1,110,511
Accumulated losses (156,988) (645,275)
===============================================================================
===============================================================================
Nine months Year ended
period ended June 30,2005
March 31, 2006
===============================================================================
Profit/(loss) before taxation 490,549 (4,042)
Profit after taxation 486,642 96,288
===============================================================================6.2. Ghandhara Industries has offered 300 percent right shares on 23 May 2006. Subsequent to the Balance Sheet date the company has subscribed 3,873,813 ordinary shares of Rs 10 each amounting to Rs 38,738 thousand.7. LONG TERM DEPOSITS ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Tenders 314 314
Central Depository Company of Pakistan limited 54 54
Deposits against lease facilities 1,612 1,932
Utility deposits 3,101 -
Others 80 80
5,161 2,380
===============================================================================8. LONG TERM PREPAYMENT===============================================================================
2006 2005
Rupees in '000
===============================================================================
Prepaid rent - 5,400
===============================================================================9. STORES, SPARES AND LOOSE TOOLS===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Stores 9.1 25,251 31,903
Spares and loose tools 13,621 632
38,872 32,535
===============================================================================9.1. Stores include paints and chemicals in bath amounting to Rs 10,033 thousand (2005: Rs 10,033 thousand).9.2. There are no stores held for capital expenditure at year-end. 10. STOCK-IN-TRADE ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Raw Material
In hand 519,282 215,249
In transit 192,668 274,128
711,950 489,377
Work in Process 13,807 9,768
Finished Goods
Vehicles
in hand 344,004 126,635
with third party 9,354 -
Car-CBU
in hand 22,407 129,907
In bond 142,788 380,365
with third parties 10.1 70,438 148,109
in transit 5,312 1,482
Spare parts 25,941 37,412
620,244 823,910
1,346,001 1,323,055
===============================================================================10.1.Vehicles with third parties include vehicles costing Rs 13.877 thousand which are under part settlement-(Refer Note No. 19.5) 10.2. The stock-in-trade is under pledge/joint hypothecation with banks against Short term running finance and Finance against imported merchandise. 11. TRADE DEBTS ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Unsecured - Considered Good
Vehicle and assembly charges-Associated Companies 11.1 52,699 11,018
Vehicle-Others 286,536 45,285
Spares Parts 2,877 1,108
342,112 57,411
===============================================================================11.1. This represents amount receivable from following related parties:===============================================================================
2006 2005
Rupees in '000
===============================================================================
Ghandhara Industries Limited 52,166 11,018
Universal Insurance Company Limited 533 -
52,699 11,018
===============================================================================The maximum amount due from the associated companies at the end of any month was Rs 52,699 thousand (2005:Rs 25,752 thousand)11.2. Trade debts comprised of amounts receivable from the sale of goods. The directors consider that the carrying amount of trade debts approximates their fair value. 12. LOAN AND ADVANCES ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Unsecured - Considered Good
Advances to
Executives 12.1 - 245
Staff 3,259 3,033
Advances to suppliers, contractors and others 29,956 8,305
33,215 11,583
===============================================================================12.1. The maximum amount due from executives at the end of any month was Rs 245 thousand (2005: Rs 245 thousand).13. PREPAYMENTS ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Insurance-(Associated undertaking-Universal Insurance) 2,616 2,047
Prepaid rent 13.1 7,350 5,400
Others 75 613
10,041 8,060
===============================================================================13.1. Prepaid rent includes Rs. 1,950 thousand paid to Gammon Pakistan Limited, an associated undertaking.14. OTHER RECEIVABLES ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Receivable from Government
Income tax deducted at source / Paid in advance 28,269 30,761
Sales tax adjustable 6,382 92,087
Custom duty refundable - 39
34,651 122,887
Bank Guarantee margin 23,138 4,581
Security deposit and Earnest money 9,015 7,099
Letter of Credit Margin 2,443 3,312
Commission receivable - 5,273
Lease deposits 480 -
Other receivables 14.1 122 9,042
69,849 152,194
===============================================================================14.1. Other receivable includes Knock down (KD) claims receivable Nil (2005:Rs5,903 thousand).15. CASH AND BANK BALANCES ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Cash-in-hand 30 -
Cash-at-bank
Current accounts 24,212 25,890
Deposit accounts 16,237 19,265
Provision for doubtful bank account 15.1 (3,912) (3,912)
36,567 41,243
===============================================================================15.1. This represents provision made against bank balance held with Indus Bank Limited whose operations were ceased by the State Bank of Pakistan. The above balance is net of Rs 42.586 million deposited in the Deposit account and margin account against four letters of credit due in May and June 2000. Despite full payments and several reminders, the payment of above letters of credit has not been made to the supplier of goods. The Company considers that it has discharged its obligation against the said letters of credit.15.2. Balance in deposit account includes a separate account for deposits from dealers amounting to Rs 15,611 thousands (2005: 15,611 thousand) 16. SHARE CAPITAL ===============================================================================
2006 2005
===============================================================================
Authorized80,000,000 Ordinary Shares of Rs 10 each 800,000 800,000
Issued, subscribed and paid - up
2006 2005
===============================================================================
14,800,000 14,800,000 Fully paid up in cash 148,000 148,000
200,000 200,000 Issued as fully paid bonus shares 2,000 2,000
30,002,500 30,002,500 Issue of shares for acquisition 300,025 300,025
45,002,500 45,002,500 450,025 450,025
===============================================================================16.1. The Company has one class of ordinary shares which carry no right to fixed income.16.2. The company is a subsidiary of Bibojee Services (Private) Limited holding 62.32% (2005: 62.32%) share in the capital of the company. 17. SHARE PREMIUM ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance at beginning and end of year 40,000 40,000
===============================================================================18. SURPLUS ON REVALUATION OF FIXED ASSETS===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance as at 1 July 335,266 373,520
Less: Transferred to unappropriated Profit /loss on account of
incremental depreciation for the year net of deferred tax (34,359) (38,254)
Balance as at 30 June 300,907 335,266
===============================================================================19. LONG TERM FINANCING===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
From banks-Secured
From banking companies 19.1 266,667 400,000
From others 19.5 - 50,000
From Holding Company 19.6 55,730 70,730
322,397 520,730
===============================================================================19.1. Loan from banking companies and others===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
National Bank of Pakistan Limited 19.2 233,334 350,000
Saudi Pak Industrial and Agricultural
Investment Co. (Pvt) Limited 19.3 33,333 50,000
266,667 400,000
===============================================================================19.2. National Bank of Pakistan Limited===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance as at 01 July 2005 350,000 350,000
Less: Transferred to current maturity (116,666) -
233,334 350,000
===============================================================================The company has arranged Term financing facility amounting to Rs 350 million from National Bank of Pakistan.The Term financing facility is repayable in six equal semi annual installments starting at the end of 30 months from the date of disbursements. The loan was disbursed on 30 April, 2004. The Term financing facility carries markup at six months T. bills cut off rate plus 3%. The markup will be reviewed and determined in the beginning of every base period (six months) on the basis of latest T. BiIl's cut off yield. The rate will be fixed for the whole six months. The Term finance facility is secured against first Pari Passu charge over fixed assets amounting to Rs 950 million and pledge of shares of an associated company. 19.3. Saudi Pak Industrial and Agricultural Investment Co. (Pvt) Ltd ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance as at 01 JuIy/ Disbursed during the year 83,333 100,000
Payments made during the year 33,333 16,667
50,000 83,333
Payable within the following twelve months (16,667) (33,333)
Balance as at 30 June 33,333 50,000
===============================================================================The term finance facility is repayable in six monthly installments starting at the end of six months from the date of disbursement. The term finance facility carries a mark up at KIBOR+2.5 %and is secured against fixed assets of the company amounting to Rs. 125 million.19.4. Allied Bank Limited ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance as at 01 July 6,000 18,000
Repayment during the year 6,000 12,000
6,000
Less: Repayable within the following twelve months - (6,000)
- -
===============================================================================The loan was repaid during the year.19.5. World Automobiles ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance as at 01 July 144,000 194,000
Repayment / adjustment during the year (94,000) (50,000)
50,000 144,000
Transferred to current maturity (50,000) (94,000)
Balance as at 30 June - 50,000
===============================================================================The Company and Bibojee Services (Private) Limited, the Holding Company, have signed a compromise agreement with World Automobiles and World Korean Motors Limited wherein the Company has agreed to pay Rs 200 million to World Automobiles as full and final settlement of all claims and/or potential claims of both parties against each other. However, in the event of Contract Assembly Agreement signed by World Automobiles and GNL (whether performed or not) the last payment in the Compromise Agreement being Rs.50 million due and payable byGNL on 30th June 2007 shall not be claimed by World Automobiles from GNL. However, in the event that the contract assembly agreement is not signed, the last installment will remain effective and due. The company has settled Rs 94 million during the year against cash payment of Rs 10 million and delivery of vehicles having sales value of Rs 64 million, out of which vehicles having sales value of Rs 17.327 million held by World Automobiles are to be invoiced. In addition the company has adjusted Rs 20 million payable by World Automobiles to the holding company. 19.6. From Holding Company ===============================================================================
2006 2005
Rupees in '000
===============================================================================
(Bibojee Services (Private) Limited)
Balance at beginning of year 70,730 70,730
Less: Repaid during the year 15,000 -
Balance at end of year 55,730 70,730
===============================================================================The loan is unsecured and interest free. The terms of the balance payment have not yet been decided.20. LIABILITIES AGAINST ASSET SUBJECT TO FINANCE LEASE ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Balance at beginning of year 2,754 4,146
Addition during the year 16,215 -
Less: Repaid during the year (5,565) (1,392)
20.1 13,404 2,754
Less: Due within the following twelve months (6,054) (1,489)
Balance at end of year 7,350 1,265
===============================================================================20.1. This represents vehicles acquired under finance lease arrangements from a leasing company. The arrangements are secured by title of assets leased. Rentals are payable in monthly installments. Repair and insurance costs are to be borne by the Company. Purchase option can be exercised by the Company by adjustment of security deposits / payment of residual value at the expiry of lease period. The rate of financial charges applied ranges from 7% to 14% per annum (2005: 7% per annum).The future minimum lease payments to which the Company is committed under the agreements are due as follows: - ================================================================================================================
2006 2005 2006 2005
Present value of minimum lease
Minimum lease payments Financial charges payments
Rupees in '000
================================================================================================================
Within 1 year 7,262 1,636 1,208 147 6,054 1,489
2 to 5 year 7,904 1,298 554 33 7,350 1,265
15,166 2,934 1,762 180 13,404 2,754
================================================================================================================
===============================================================================
2006 2005
Rupees in '000
===============================================================================
Classified as under:
Liabilities against assets subject to finance lease 7,350 1,265
Current portion of liabilities against assets
subject to finance lease 6,054 1,489
13,404 2,754
===============================================================================21. LONG TERM DEPOSITS===============================================================================
2006 2005
Rupees in '000
===============================================================================
Dealer deposits 15,000 15,000
Vendor 111 111
Others 500 500
15,611 15,611
===============================================================================21.1. These deposits are interest free and are not refundable during subsistence of dealership.22. DEFERRED LIABILITIES ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Provision for Gratuity 22.1 20,233 17,927
Provision for Compensated absences 22,517 15,109
Deferred Taxation 22.2 160,047 20,579
202,797 53,615
===============================================================================22.1. PROVISION FOR GRATUITY===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance at beginning of year 17,927 16,577
Add: Charge for the year 3,702 2,890
21,629 19,467
Less: Payments during the year (1,396) (1,540)
Balance at end of year 20,233 17,927
Present value of defined benefit obligation 22,499 18,024
Benefits payable 37 -
Unrecognized actuarial (loss)/ gain (2,303) (97)
Balance at end 20,233 17,927
Charge to Profit and Loss accounts for the year
Current service cost 2,059 1,512
Interest cost 1,643 1,378
3,702 2,890
===============================================================================
===============================================================================
2006 2005
Rupees in '000
===============================================================================
Principal actuarial assumptions at the balance sheet date for:
Discount rate 9% 9%
Future salary increases 9% 9%
Average expected remaining life 14 Years 14 Years
===============================================================================22.2. DEFERRED TAX===============================================================================
2006 2005
Rupees in '000
===============================================================================
The following are the major deferred tax liabilities and assets recognized
by the Company:
Accelerated tax depreciation/Revaluation of
fixed assets 195,609 165,362
Staff benefits (14,962) (11,643)
Provision for bank balances (1,369) (1,369)
Tax losses - (131,771)
Impairment of investment (19,231) -
160,047 20,579
Certain deferred tax assets and liabilities have been offset
The following is the analysis of the deferred tax balances
(after offset) for financial reporting purposes.
Deferred tax liabilities 195,609 165,362
Deferred tax assets (35,562) (144,783)
160,047 20,579
===============================================================================23. TRADE AND OTHER PAYABLES===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Creditors 199,124 95,168
Bills payable 151,607 33,431
Accrued expenses 19,404 76,676
Refundable - CKD/CBU Business 11,969 12,119
Advance from customers 62,879 530,664
Commission 8,306 7,257
Unclaimed gratuity 231 231
Security deposit 550 550
Custom duty 91,536 156,942
Due to associated companies 23.1 26,680 20,388
Sales tax payable 13,471 42,736
Withholding tax 156 537
Retention money 2,594 2,594
Workers profit participation fund 23.2 20,839 14,521
Workers Welfare fund 5,049 -
Un claimed dividend 1,013 299
Dealers deposit payable on cancellation of dealership 2,000 6,000
Waqaf-e- Kuli Khan 2,115 1,107
Others 23.3 22,637 739
642,160 1,001,959
===============================================================================23.1. Due to associated companies===============================================================================
2006 2005
Rupees in '000
===============================================================================
Nissan Diesel Motor Company Limited - Japan 16,222 12,551
Universal Insurance Company Limited - 3,385
Bibojee Services (Private) Limited 2,548 -
The General Tyre & Rubber Company of Pakistan Limited 7,910 4,452
26,680 20,388
===============================================================================23.2. Workers profit participation fund===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance at beginning of year 14,521 8,824
Add: Charge for the year 20,839 14,521
Interest on WPPF Contributions 1,235 1,868
36,595 25,213
Less: Payments during the year (15,756) (10,692)
Balance at end of year 20,839 14,521
===============================================================================23.3. This includes amount of Rs 17.327 (2005:Nil) million payable to World Automobiles.24. ACCRUED MARK UP ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Short term bank financing 13,605 1,612
Long term financing 5,939 5,470
19,544 7,082
===============================================================================25. SHORT TERM FINANCING===============================================================================
2006 2005
Rupees in '000
===============================================================================
Disbursed during the year 50,000 -
===============================================================================25.1. The company has arranged Term Finance facility of Rs 50 million from Pak Oman Investment Company. This facility is repayable in one year from the date of disbursement 10 May, 2006. The facility carries mark up at six months' KIBOR plus three percent per annum payable monthly. The facility is secured against pledge of stocks.26. FINANCE UNDER MARKUP ARRANGEMENT ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Secured
Running finance from banks 26.1 160,350 71,202
Finance against imported merchandise 329,929 63,635
Un secured From banks - 16,878
490,279 151,715
===============================================================================26.1. The company has aggregate running finance facilities of Rs 200 million from National Bank of Pakistan. The rate of markup is based on 3 months KIBOR+2.5 % payable quarterly. The arrangements are secured by way of equitable mortgage and first pari passu charge over fixed assets of the company.27. CURRENT PORTION OF LONG TERM FINANCING ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
From Banking companies 27.1 133,333 39,333
From others 27.2 50,000 94,000
183,333 133,333
===============================================================================27.1. From Banking companies===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Saudi Pak Industrial and Agricultural 19.3
Investment Co. (Pvt) Ltd 16,667 33,333
Allied Bank Limited - 6,000
National Bank of Pakistan 116,666 -
133,333 39,333
===============================================================================27.2. From Others===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
World Automobiles 19.5 50,000 94,000
50,000 94,000
===============================================================================28. PROVISION FOR TAXATION===============================================================================
2006 2005
Rupees in '000
===============================================================================
Balance at beginning of year 15,420 43,328
Provision for the year
Prior year adjustment (15,297) -
Current year payment / adjustment (45,768) (43,205)
Add: Provision made for the current year 134,005 15,297
88,360 15,420
===============================================================================The tax liability of the company represents the minimum tax at the rate of 0.5 percent of turnover under section 113 of the Income Tax Ordinance, 2001. The income tax assessment of the company has been finalised upto and including tax year 2005.29. CONTINGENT LIABILITIES & COMMITMENTS Contingencies During 1999-2000, the company received a show cause notice from Appraisement Collectorate, Karachi claiming that the company on import of certain CKD from its principals in Japan enjoyed special discounts and the said CKD were cleared on these discounted values without addition of "cost of association". The recovery proceedings are for Rs 6.30 million representing custom duty, sales tax and penalties, if any, there on. The above show cause notice is being contested in an appeal with Customs, Excise & Sales Tax Appellate Tribunal. No provision has been made in these accounts as in the opinion of company's legal advisor the authorities contention may not sustain to recover adjudged amount of duty and other dues. Outstanding letters of credit amounting to Rs 277,000 thousand (2005: Rs 300,269 thousand) The company's bankers have issued bank guarantees amounting to Rs 23,138 thousand (2005: Rs 10,551 thousand) against supply of vehicles to government authorities. Post dated cheques amounting to Rs 413,389 thousand (2005: 599,651 thousand) on account of duty differential in favour of Collector of Customs have been issued. These cheques will be returned on submission of Consumption Certificates (compliance with deletion program). 30. OPERATING RESULTS ============================================================================================================
Note Manufacturing Trading Total
2006 2005 2006 2005 2006 2005
Rupees in '000 Rupees in '000 Rupees in '000
============================================================================================================
Sales 4,156,827 3,615,888 1,028,474 456,575 5,185,301 4,072,463
Sales Tax (494,378) (471,579) (133,788) (59,579) (628,166) (531,158)
Sales Return (60,975) - - - (60,975) -
Commission (37,375) (31,869) (18,575) (5,224) (55,950) (37,093)
Net Sales 3,564,099 3,112,440 876,111 391,772 4,440,210 3,504,212
Cost of Sales
Opening stock 126,635 143,192 695,792 37,797 822,427 180,989
Cost of goods manufactured 30.3 3,287,184 2,794,632 - - 3,287,184 2,794,632
Purchases - 325,289 969,502 325,289 969,502
Closing stock (353,358) (126,635) (261,574) (695,792) (614,932) (822,427)
3,060,461 2,811,189 759,507 311,507 3,819,968 3,122,696
Gross Profit 503,638 301,251 116,604 80,265 620,242 381,516
Administrative expenses 32 70,972 56,624 17,444 7,133 88,416 63,757
Selling expenses 31 6,345 5,086 28,050 15,193 34,395 20,279
77,317 61,710 45,494 22,326 122,811 84,036
Operating profit 426,321 239,541 71,110 57,939 497,431 297,480
Other Income 35 12,431 27,490 7,993 - 29,424 27,490
12,431 27,490 7,993 - 20,424 27,490
438,752 267,031 79,103 57,939 517,855 324,970
Financial charges 34 (81,133) (30,679) (19,944) (3,874) (191,077) (34,553)
Provision for impairment in value
of investment 33 - (1,050) - - - (1,050)
Workers 'Welfare Fund 33 (5,049) - - - (5,049) -
Workers 'Profit
Participation Fund 33 (20,839) (14,521) - - (20,839) (14,521)
(197,021) (46,250) (19,944) (3,874) (126,965) (50,124)
Profit before taxation 331,731 220,781 59,159 54,065 390,890 274,846
============================================================================================================30.1. The administrative expense and financial charges have been allocated under manufacturing and trading activities on the basis of turnover. Selling expenses were charged on the basis of activity performed by each division.30.2. Sales returned during the year have been included in Sales as contract has been restored and supplies have been made. Accordingly cost of sale has been recorded. 30.3. COST OF GOODS MANUFACTURED ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Work in process at beginning of year 9,768 30,016
Raw materials and vendor parts consumed 30.4 2,998,768 2,522,513
Stores and spares consumed 37,678 47,451
Salaries, wages and benefits 30.5 77,498 53,845
Transportation 1,264 1,033
Repair and maintenance 13,502 8,979
Depreciation 95,548 93,830
Material Handling 369 1,467
Insurance 6,853 5,107
Communication 618 575
Rent, rates and taxes 2,403 845
Traveling and entertainment 4,453 1,645
Power generation costs 26,122 18,168
Vehicle running 28 388
Printing, stationery and office supplies 764 442
Royalty expense 19,318 15,089
Plant security 1,164 435
Technical consultancy fee 2,813 1,300
Others 2,060 1,272
3,300,991 2,804,400
Work in Process at end of year (13,807) (9,768)
3,287,184 2,794,632
===============================================================================30.4. Raw material and vendor parts consumed===============================================================================
2006 2005
Rupees in '000
===============================================================================
Stock at beginning of year 215,249 217,249
Purchases 3,302,801 2,520,513
3,518,050 2,737,762
Stock at end of year (519,282) (215,249)
2,998,768 2,522,513
===============================================================================30.5. Salaries, wages and benefits include Rs. 758 thousands (2005: Rs 683 thousands) in respect of provident fund contribution and Rs 755 thousand (2005:Rs 589 thousand) in respect of gratuity scheme.31. DISTRIBUTION COST ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Salaries, wages and benefits 31.1 3,675 1,306
Fee and subscription 15 -
Utilities 5 9
Rent of display centre 12,000 -
Repair and maintenance 233 51
Insurance 312 706
Travelling and entertainment 1,945 1,018
Vehicle running 101 54
Printing, stationery and office supplies 709 523
Sales promotion expense 15,047 16,257
Godown and forwarding 42 60
Others 311 295
34,395 20,279
===============================================================================31.1. Salaries, wages and benefits include Rs. 186 thousand (2005: Rs 77 thousand) in respect of provident fund contribution and Rs 87 thousand (2005: Rs 68 thousand) in respect of gratuity scheme.32. ADMINISTRATIVE EXPENSES ===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Salaries, wages and other benefits 32.1 43,652 30,036
Utilities 5,662 4,735
Rent, rates and taxes 6,924 1,461
Directors' Fee 111 90
Insurance 1,746 1,270
Repairs and maintenance 4,200 4,209
Auditors' remuneration 32.2 350 280
Depreciation 3,818 2,331
Travelling and conveyance 6,943 5,443
Legal and Professional charges 4,160 5,152
Vehicle running 2,084 995
Telephone and postage 852 974
Printing and stationery 1,764 1,884
Subscription 2,215 1,538
Security expenses 387 430
Office canteen and staff expenses 202 238
News papers & Periodical 41 88
Godown and forwarding 84 100
Share registrar services 794 643
Amortization 308 136
Miscellaneous 2,119 1,724
88,416 63,757
===============================================================================32.1. Salaries, wages and benefits include Rs.986 thousand (2005: Rs 1,031 thousand) in respect of provident fund contribution and Rs 2,860 thousand (2005:Rs 2,233 thousand) in respect of gratuity scheme.32.2. Auditors' remuneration ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Hameed Chaudhri & Co
Audit fee 155 125
Out of pocket expense 20 20
175 145
Muniff Ziauddin & Co
Audit fee 155 125
Out of pocket expense 20 10
175 135
350 280
===============================================================================33. OTHER OPERATING EXPENSES===============================================================================
2006 2005
Rupees in '000
===============================================================================
Workers profit participation fund 20,839 14,521
Workers' Welfare Fund 5,049 -
Provision for impairment in the value of investment - 1,050
25,888 15,571
===============================================================================34. FINANCE COST===============================================================================
2006 2005
Rupees in '000
===============================================================================
Markup on short term finance 59,202 3,404
Finance charges on leased assets 1,584 245
Markup on long term loan 37,776 27,168
Bank guarantee charges - 314
Exchange loss - 481
Interest on WPPF 1,235 1,868
Bank and other charges 1,280 1,073
101,077 34,553
===============================================================================35. OTHER OPERATING INCOME===============================================================================
2006 2005
Rupees in '000
===============================================================================
Income from financial assets
Interest income 2,086 1,338
Dividend from Ghandhara Industries
Limited (an associated company) 646 -
2,732 1,338
Income non-financial assets
Gain on sale of fixed assets 186 162
Scrap sales 7,911 9,305
Incentive income - 3,289
Commission income 1,830 5,273
Indenting commission - 1,263
Exchange gain 7,704 -
Others 61 1,345
17,692 20,637
Old liabilities written back - 5,515
20,424 27,490
===============================================================================36. BASIC EARNING PER SHARE===============================================================================
2006 2005
===============================================================================
Profit after taxation for the year attributable to
Ordinary Shareholders 132,714 270,054
Weighted average number of ordinary shares
outstanding at year-end Number 45,003 45,003
Basic Earning Per Share Rupees 2.95 6.00
=============================================================================== (There is no dilutive effect on basic earnings per share of the Company)37. RECONCILIATION OF PROFIT BEFORE TAXATION TO NET CASH FROM OPERATING ACTIVITIES ===============================================================================
2006 2005
Rupees in '000
===============================================================================
Profit for the year before taxation 390,890 274,846
Adjustments:
Depreciation 99,664 96,161
Markup / interest expenses and lease finance charges 101,077 34,553
Liabilities and financial charges written back - (5,515)
Profit on sale of fixed assets (186) (162)
Provision for gratuity 3,702 2,890
Provision for compensated absences 7,956 7,527
Exchange gain (7,704) 1,050
204,509 136,504
Operating profit before working capital changes 595,399 411,350
(Increase) / Decrease in Current Assets
Stores, spares and tools (6,337) 137
Stock-in-trade (22,946) (839,908)
Trade debts (311,701) (43,480)
Loan and advances (21,632) 17,613
Prepayments 3,419 (10,179)
Other receivable 80,109 (81,579)
(279,088) (957,396)
(Decrease) / increase in Current Liabilities
Trade and other payables (409,809) 617,385
Working Capital changes (93,498) 71,339
Gratuity paid (1,396) (2,606)
Compensated leave absences (777) -
Interest / markup paid (88,615) (30,333)
Income tax paid (43,276) (45,451)
(134,064) (78,390)
Cash flow used-in operating activities (227,562) (7,051)
===============================================================================38. ANALYSIS OF CHANGES IN CASH AND CASH EQUIVALENTS===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Balance at beginning of year 41,243 69,084
Decrease in cash and cash equivalents (4,676) (27,841)
Balance at end of year 15 36,567 41,243
=============================================================================== NON CASH TRANSACTIONS===============================================================================
2006 2005
Note Rupees in '000
===============================================================================
Adjustment of Long Term Loan-World Automobile 19.5 84,000 -
===============================================================================39. EXECUTIVES' REMUNERATION===========================================================================================
2006 2005
(Rupees in '000)
Directors Executives Directors Executives
===========================================================================================
Managerial Remuneration - 7,617 300 5,297
Provident fund - 298 18 245
Gratuity - 901 258 613
Utilities - 1,074 68 937
Medical - 50 153 185
- 9,940 797 7,277
Number of persons - 6 1 4
===========================================================================================Certain executives of the company are also provided with free use of the Company maintained vehicles.40. PLANT CAPACITY Against the designed annual production capacity of 6,000 vehicles at car plant, on single shift basis, company has assembled 1,732 vehicles of Land Rover and Chevrolet 1000 cc cars and also processed 2,712 Truck cabs through paint shop. Due to change in model the Company is planning to introduce new Nissan Sunny passenger car, consequently the plant capacity remained under utilised. Against the production capacity of 2,500 Trucks and buses on single shift basis Company produced 2,712 Trucks and buses of Nissan and Isuzu. The excess production has been met through additional working hours. 41. RELATED PARTY TRANSACTIONS ===========================================================================================================
2006 2005
Rupees in '000
Name of Related Party and Nature of Transaction Transaction Transaction
Nature of relationship Value Value
===========================================================================================================
(a) Holding Company
Bibojee Services (Private) Limited Sale of cars 3,705 1,185
Rent of showroom 12,000 -
(b) Associated Companies
Universal Insurance Company Limited Insurance premium 14,519 13,687
(Common Directorship) Sale of cars 5,259 6,870
The General Tyre and Rubber Company of Purchase of tyres 58,612 46,833
Pakistan Limited Sale of cars 5,103 1,125
(Common Directorship)
Rehman Cotton Mills Limited Sale of cars 6,834 -
(Common Directorship)
Janana De Malucho Textile Mills Limited Sale of cars 7,315 -
(Common Directorship)
Bannu Wollen Mills Limited Sale of cars 5,610 -
(Common Directorship)
===========================================================================================================
=========================================================================
2006 2005
Rupees in '000
Transaction Transaction
Value Value
=========================================================================
Ghandhara Industries Limited Contract assembly 23,276 16,080
(Common Directorship) Sale of car - 950
Purchase of parts - 438
Dividend received 646 -
Nissan Diesel Motor Company Royalty 19,317 15,665
Limited - Japan Dispatch fee 2,813 989
(Equity Investment/technical assistance agreement)
Nissan Motor Company Royalty - 14
Limited - Japan
(Technical assistance agreement)
Gammon Pakistan Limited Office Rent 2700 -
(Common Directorship)
=========================================================================Related party transactions are stated at prices considered equivalent to prices that would prevail at arm's length transactions substantiated in the following manner:a) For certain sale of goods and purchase of services at price determined in accordance with the methods prescribed in the Fourth Schedule to the Companies Ordinance, 1984. b) For certain imports, comparison of the transaction price with the valuation determined by the custom authorities by applying the valuation methods described in the Customs Act, 1969 for assessment of custom duty which methods are generally similar to the methods given in the Fourth Schedule to the Companies Ordinance, 1984. There were no transactions with the management personnel other than under the terms of employment. 42. FINANCIAL INSTRUMENTS AND RELATEI DISCLOSURES 42.1. Interest rate risk exposure The Company's exposure to interest rate risk on its financial assets and liabilities as of 30 June are summarized as follows: ===========================================================================================================================
2006 2005
Interest bearing Non-Interest bearing
Maturity Maturity Maturity Maturity
upto one after one Sub-total upto one after one Sub-total Total Total
year year year year
Rupees in '000
===========================================================================================================================
Financial assets
Long term investment - - - - - - - -
Trade debts - - - 342,112 - 342,112 342,112 57,411
Loans and advances - - - 33,215 - 33,215 33,215 11,583
Other receivables - - - 35,198 - 35,198 35,198 29,307
Bank balances 12,325 - 12,325 24,212 - 24,212 36,537 41,243
12,325 - 12,325 434,737 - 434,737 447,062 139,544
Financial liabilities
Long term financing 183,333 266,667 450,000 - 55,730 55,730 505,730 654,053
Liabilities against assets
subject to finance lease 6,054 7,350 13,404 - - 13,404 2,754
Trade and other payables - - - 535,984 535,984 535,984 801,445
Long Term Deposits - - - - 15,611 15,611 15,611 15,611
Accrued Mark-up/ interest 19,544 - 19,544 - - - 19,544 7,082
Short term finances - 50,000 50,000 - - - 50,000 -
Running finance under mark up
arrangement 490,279 - 490,279 - - - 490,279 151,715
699,210 324,017 1,023,227 535,984 71,341 607,325 1,630,552 1,632,670
On-balance sheet gap (686,885) (324,017) (1,010,902 (101,247 (71,341) (172,588) (1,183,490) (1,493,126)
===========================================================================================================================42.2. Effective interest rates===============================================================================
2006 2005
(Rupees in '000)
===============================================================================
Liabilities
Long term loan T Bills + 3% T Bills + 3%
Obligation under finance leases 7%-14% 7.00%
Short term financing 3 Months 3 Months
KIBOR+2.5 % KIBOR+2.5 %
Bank deposits 6.2% 6.2%
===============================================================================42.3. Concentration of credit risksThe Credit Risk represents the accounting loss that would be recognised at the reporting date if counter parties failed to perform as contracted. ===============================================================================
2006 2005
(Rupees in '000)
===============================================================================
The financial assets which are subject to
credit risks amounted to: 447,062 139,544
===============================================================================The company believes that it is not exposed to major concentration of credit risk. To manage exposure to credit risk, the company applies credit limits to its customers.42.4. Fair value of the financial instruments The carrying value of all the financial instruments reflected in the financial statements approximates their fair values. 43. CORRESPONDING FIGURES The following comparative figures have been rearranged for better presentation. ===========================================================================
Rupees in '000 Rupees in '000
From To
===========================================================================
Other receivable Trade Debtors
Associated Undertaking 11,018 Associated Undertaking 11,018
===========================================================================44. APPROVAL OF FINANCIAL STATEMENTSThe financial statements were approved by the board of directors and authorised for issue on 21 September, 2006. |